FMD Capital Management

Posts Tagged: low volatility

3 Core Bond ETFs That Are Coping Well With Rising Rates

Written by David Fabian, January 06th, 2017

A reader recently sent me a question asking why you would own a bond fund when interest rates are on the move higher.  This type of sentiment is more than likely on the minds of many investors as they prepare for 2017 and evaluate adjustments to their asset allocation.

The short answer is that every diversified portfolio should have bond exposure to balance out the risk of other asset classes – i.e. stocks and commodities.  Bonds have historically provided a shock absorber for the equity side of the portfolio and have not shown any signs of relinquishing that trait.  Simply letting go of all your bond exposure will unnecessarily tilt your risks and returns towards a single outcome.  Read more

5 Top Stock ETFs With Monthly Dividends

Written by David Fabian, October 11th, 2016

Income investors are typically comforted by the reliability of monthly dividends.  This consistent stream of payments is common among bond funds as a steady source of passive income.  However, there are much longer gaps in the cash flow cycle from the majority of stock-focused ETFs that pay quarterly dividends.  This creates a lumpy pattern over the course of a calendar year that may be inconsistent with fixed budgets and other financial projections.

Fortunately, there are a variety of stock-focused ETFs that have set out to solve this issue by declaring smaller monthly payments rather than larger quarterly deposits.  This creates a smoother flow of income and allows for easier forecasting of spendable portfolio yield. The following list of funds are some of the larger and more established offerings in this group.

Read the complete article at NASDAQ.com

The Fear Trade Is Falling Apart

Written by David Fabian, October 05th, 2016

The fear trade has been one of the most successful avenues for investors to take part in this year.  Treasury bonds, gold, utilities, consumer staples, and REITs have all been a big contributor to outsized gains versus a traditional basket of diversified stocks and bonds.  These sectors are well-known defensive plays that tend to perk up during periods of duress in stocks or as interest rates fall.  They are also beloved by income investors as a meaningful pickup in yield versus a conventional Treasury bond or S&P 500 Index fund.  Read more

Remember the ‘All-Weather’ Portfolio? It’s Having a Killer Year

Written by David Fabian, September 27th, 2016

In 2014, Tony Robbins introduced the world to the ‘All-Weather’ portfolio as constructed by renowned hedge fund manager Ray Dalio. Also known as the ‘All Season’ strategy, Dalio proposed a mix of multiple asset classes that together can survive virtually any storm.

The key components and weights of this strategy are the following:

30% in U.S. stocks

40% in Long-term U.S. Treasury Bonds

15% in Intermediate-Term U.S. Treasury Bonds

7.50% in Gold

7.50% in broad Commodity basket

The end result is a diverse group of inflationary and deflationary investments that that work to lower volatility and potentially enhance returns over the long-term.

Read the complete article at NASDAQ.com

5 Notable Themes Among ETF Closures

Written by David Fabian, September 13th, 2016

No one in the ETF industry does data quite like ETF.com, which is why I love their free resources for investors. It’s one of my “go to” spots when researching industry trends and investment ideas.

In the course of this weekly analysis, I stumbled upon a list of all ETF closures by year dating back over a decade.  You can view the complete list here.  After sorting and examining the results, I was able to compile numerous observations and common characteristics for funds that are apt to be shut down.

Read the complete article at NASDAQ.com