But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Weighing the pros and cons of unconstrained bond funds
Unconstrained bond funds can invest anywhere in the world. They can have simultaneous positions in both high-yield and investment-grade bonds, government and corporate, or fixed and floating rate bonds.
Investor interest in these funds is strong. Unconstrained bond funds offer options for managing fixed income risks, without being shackled by index constraints.
The U.S. ETF market is huge. It also dominates overall ETF trading activity. The U.S. market share came close to 89%, or $14 trillion. It was up 7.7% since 2012.
The U.S. market dominates the global ETF space, with ~72% of global ETF assets. The dominant ETF issuers in U.S. include BlackRock (BLK), State Street Corp. (STT), and Vanguard.
In two of the most important parameters of returns—return on assets and return on average common equity—Wells Fargo consistently beats its peers. It has a very low volatility.
Management sets the vision for an organization. Wells Fargo’s vision is large, but it’s already halfway there. Wells Fargo is the largest bank in the U.S.—by market capitalization.
Wells Fargo (WFC) believes that people are a competitive advantage source. Integrating sound human resource practices lies at the core of Wells Fargo’s strategy.
A bank’s growth can be limited if it doesn’t have enough regulatory capital. If the bank doesn’t have enough capital, it will be forced to dilute its equity to raise capital.
Wells Fargo (WFC) reduced its provisioning expenses in the last two years. The decrease in provisioning leads to higher profits. Net charge-offs have also decreased.
Wells Fargo wants to maintain a balance between its interest income from loans and non-interest income. Non-interest income accounts for nearly 49% of Wells Fargo’s revenues.
Online banking is the cheapest mode for servicing the customer in the long run. Online banking involves a one-time fixed cost. After that, the maintenance cost is very low.
Maintaining a high net interest margin has always been part of Wells Fargo’s (WFC) strategy. Wells Fargo has consistently been better than the industry’s average net interest margin.
If a bank is able to keep its cost of deposits low, it will have a competitive advantage. Wells Fargo has the lowest cost of deposits among its peers—despite having a very high deposit base.
Wells Fargo’s (WFC) first, and possibly the most important, operational strategy is focusing on cross-selling. It’s the most important pillar of its operational strategy.
Wells Fargo’s (WFC) broad operation level strategy over the long run can be described by two words—slow and steady. It doesn’t take many risks. It’s stable and boring.
“Strategy” can be defined in many ways. Generally, strategy is a long-term plan. There are two main aspects to strategy—operational level strategy and human resource level strategy.
While emerging market stocks are underperforming U.S. stocks, Russ explains why longer-term investors may want to give EM markets another look.
After his exit from PIMCO, Bill Gross said that he welcomes the new challenges in this phase of his career.
Large and established bond ETFs seem to be the biggest beneficiaries of Bill Gross’s exit from PIMCO. BlackRock (BLK), the world’s largest ETF player, currently seems to be the biggest beneficiary of Gross’s withdrawal.
The bigger your fund gets, the more difficult investing a meaningful percentage of your assets under management in new and upcoming ideas becomes.