Gaining Perspective

My guest today is here to talk about an asset class that is often misunderstood. It wasn't until recently that all investors had access to collateralized loan obligations (CLOs). Institutional investors have benefitted from the ownership of CLOs for over 25 years, and the asset class has grown to over $1 trillion.

These are not the same bonds that eroded the economy in 2008 during the global financial crisis. It's a similar name in "C blank O," but a very different asset class. John Kim and his team at Panagram are experts in CLO investing. He is here to explain how they work, why now for individual investors, the benefits of owning CLOs, and dispel some of the myths about this often-misunderstood asset class. John will share what Panagram is doing to educate and explain why advisors should consider an allocation.

-

Here is a link to the Panagram website.

Here are links to the two ETFs mentioned in this podcast: CLOZ and CLOX.

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.

Northern Trust’s Capital Market Assumptions (CMA) report, an annual report of long-term average annualized return expectations for a wide range of asset classes, forecasts below-trend global growth at an annualized rate of 2.4% over the next 10 years, moderating developed-market inflation of 2.4%, and a lower global equity return of 6.3% a year on average. The CMA report’s asset class forecasts are driven by six key themes that Northern Trust investment experts see affecting markets and the economy over the next 10 years: restraints on global economic growth, geopolitical fault lines, adaptation to persistent inflation, central bank concessions to inflation, a sustainable green transition, and growing private markets.

Rooted in the firm’s deep capital market analysis, the CMA report informs the investment decisions and asset allocation recommendations made by Northern Trust, which as of June 30, 2023, had US$1.4 trillion in assets under management. Forecasts are created with a “forward-looking, historically aware” approach, analyzing the past drivers of returns across asset classes and developing investment themes that inform how those return drivers may evolve in the future.

-

• Here is a link to the CMA report- https://www.capitalmarketsassumptions.com/
• Here is a link to the press release announcing the CMA report- https://www.businesswire.com/news/home/20230912762715/en/Northern-Trust-Forecasts-Slow-Economic-Growth-and-Moderating-Inflation-Over-the-Next-10-Years
• Here is a link to the podcast I did with Chris in October of last year- https://www.advisorperspectives.com/podcasts/2022/10/05/northern-trust-asset-managements-capital-market-forecast

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.

Change is inevitable. When those changes involve tax law, it is extremely important for clients to meet with their financial professional, tax advisor, and legal advisor to discuss any adjustments that may need to be made to their financial, retirement, or estate plan.

One change that is looming is the expiration of provisions that were passed under the Tax Cuts and Jobs Act of 2017 (TCJA). Many of the provisions for individuals, including the higher estate tax exemption and the lower individual income tax brackets, were temporary and will expire (“sunset”) December 31, 2025 without further congressional action.

My guests today are two members of the MassMutual team. Lina Storm is the advanced sales & sales enablement marketing director dedicated to MassMutual’s Strategic Distribution team. Kathryn Wakefield is director of advanced sales at MassMutual.

-

Click hereto learn more about MassMutual Whole Life Insurance.

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule ofupcoming CE-approved virtual events.

^{The information provided is not written or intended as specific tax or legal advice. MassMutual, its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.}

^{Participating whole life insurance policies are issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.}

^{© 2023 Massachusetts Mutual Life Insurance Company (MassMutual®), Springfield, MA 01111-0001.}

^{All rights reserved.www.MassMutual.com.}

^{MM202609-306755}

Managing volatility is a high priority for advisors. The right investments can stabilize a portfolio and dampen volatility, while keeping goals on track. Increasing bond allocations used to be the standard way to reduce volatility, but with bonds more correlated to equities, their diversification value has decreased. With high inflation, bonds also aren’t providing enough real income for many investors.

Demand for private credit has increased because of its low correlation to traditional equities and bonds, and enhanced income potential. As an asset class, private credit has a history of resiliency throughout economic downturns. That was true during the pandemic, and last year when these types of loans largely held up, in contrast to the bond market which had historically bad performance.

My guest today will discuss how advisors can reduce volatility, increase income and diversify equity and bond allocations through private credit and other alternatives.

-

Here is a link to the CION website- https://www.cioninvestments.com/

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.

Artificial Intelligence has been a category-killer among investment themes in the past year.

Its impact on the wealth management profession has been profound, from gravity-defying value creation on the stock market to optimizing the day-to-day operations of an advisory practice.

Every participant in financial services, in companies large or small, needs to embrace and integrate this powerful technology into its future, or risk falling behind.

My guest today, Valery Talma, will share his perspective on the state of the art in AI investment management and how advisors can serve their clients better with AI-powered strategies.

-

Here is a link for more information about Val and QueensField:

• QueensField AI Technologies website - http://www.queensfield.ai/
• Product Brochure : 5 Model Strategies Brochure
• QueensField AI Technologies Public Indexes Indexes:

  • https://merqube.com/index/MQQFUSAI

    https://merqube.com/index/MQQFUSAT

• White Paper on the Performance of AI-Powered ETFs

• Valery Talma Linkedin page: Valery Talma Profile

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.

The rise in global interest rates is driving a “great reset” of real estate values. With the ongoing correction in private markets, REITs offer an attractive entry point with valuations at historic lows. In addition, a number of factors favor REITs:

• Large differences in valuation between public and private RE markets, while rare, have historically benefited REITs.
• REITS have historically outperformed the S&P post-Fed tightening cycles.
• REIT sectors are more concentrated in areas with strong sector secular growth, including senior housing, industrials, data centers, and residential/specialty housing.
• If the real estate repricing process continues, there will be a wave of consolidation as well-capitalized firms buy attractive properties at steep discounts.
• Longer-term, falling rates combined with an imbalance of supply and demand will be bullish for REIT valuations.

-

Here is a link for more information about Rick and PGIM:

• PGIM Select Real Estate Fund- https://www.pgim.com/investments/mutual-funds/pgim-select-real-estate-fund
• US Real Estate Fund Performance- https://www.pgim.com/investments/getpidoc?file=8CE3D7D87B7CAE1285258138004284B8
• Rick’s Latest Perspectives on REITs- https://www.pgim.com/real-estate/commentary/manager-minutes-inflection-point-reits

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.

One of the hardest parts of planning for our loved ones with disabilities is getting started. It’s overwhelming. Thinking of who will care for your child when you or your partner cannot is not easy. While we realize no one will care for your child like you do, you need to plan for the day when you no longer can.

In this session, we talk about one tool that may help with some of the financial responsibilities for supporting your loved one while helping them stay qualified for means-tested benefits supplemental security income (SSI) and Medicaid. My guest will introduce the importance of planning ahead and maintaining eligibility for public benefits whether the family is wealthy or has limited means.

-

Here is a link for more information about Jeff and Vistica Wealth Advisors:

• Vistica’s web site- https://www.ablenrc.org/
• ABLE National Resource Center- https://www.visticawa.com/blog/retirement-planning-guide-for-families-raising-a-child-with-a-disability
• Vistica’s Need Assessment- https://www.advisorperspectives.com/pdfs/2023/Needs-Assessment_fillable.pdf

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule ofupcoming CE-approved virtual events.

Several factors point to why this is an exceptional time to invest in small-cap stocks. Small-cap stocks tend to outperform after inflation peaks and in the aftermath of recessions. Small-cap valuations are at 20-plus-year lows relative to large-cap equities. Earnings revisions for small caps are stabilizing and beginning to outpace those of large caps. The M&A market is recovering, which historically correlates with improved small cap performance.

-

Here is a link for more information about Eric and Penn Capital:

• Penn Capital web site- https://www.penncapital.com/
• Connect with Eric Green on LInkedIn- https://www.linkedin.com/in/eric-green-cfa-333335/
• Penn Capital Special Situa�ons Small Cap Equity Fund (PSCMX) fact sheet- https://www.penncapital.com/sites/default/files/media/documents/Penn%20Capital%20Special%20Situations%20Small%20Cap%20Equity%20Fund%20Factsheet_2Q23.pdf
• Penn Capital Mid Cap Core Fund (PSMPX) fact sheet- https://www.penncapital.com/mutual-funds/penn-capital-mid-cap-core-fund

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.

Private equity has backed many of the recent acquisitions in the RIA profession. Indeed, approximately 77% of transactions in the first quarter of this year involved private-equity funding. Many of the largest acquirers are backed by PE firms, including Mariner, Carson, Mercer, Focus, Savant, Pathstone and the Wealth Exchange Group. When evaluating a PE-backed acquirer, there are a few things to consider, including possible drawbacks and how it will impact the future of your firm.

-

Here is a link for more information about Advisor Growth Strategies:

Advisor Growth Strategies website - https://www.advisorgrowthllc.com/

John Furey bio - https://www.advisorgrowthllc.com/team/john-furey

John Furey’s Advisor Perspectives article, The Permanent Role of Private Equity in the RIA Profession - https://www.advisorperspectives.com/articles/2023/04/14/the-permanent-role-of-private-equity-in-the-ria-profession

AGS’ annual report, the RIA Deal Room, which shares real-time, data-driven M&A industry trends looking at the mechanics underlying transactions - https://www.advisorgrowthllc.com/ria-deal-room

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.

The SouthernSun Small Cap fund (symbol: SSSIX) is up 13.5% this year, versus 10.33% (as of July 18, 2023) for its Morningstar small-blend peer group. Last year was even more impressive, when it was down only -1.37%, versus its peer group, which was down -16.24%, putting SSSIX in the first percentile of that peer group. It has approximately $400 million in assets and is a highly concentrated portfolio, with only 21 holdings as of March 31, 2023.

-

Here is a link for more information about SouthernSun:

• SouthernSun web site- https://southernsunam.com/
• SSSIX fact sheet and performance- https://southernsunam.com/investment-products/small-cap-fund/

Important Disclosures

AUM mentioned is as of 07/18/2023; Morningstar Ranking out of 611 funds in the Morningstar Small Blend category for 1-year period ended 12/31/2022. Past performance is no guarantee of future results; The information discussed represents the opinion of the host, and is subject to change. It is not intended to be a forecast of future events, a guarantee of future results, and is not intended as an offer or solicitation of the Fund nor any other products or services. It is for general informational purposes only and should not be considered an individualized recommendation or investment advice. Some of the statements contained in this podcast may be forward-looking and contain certain risks and uncertainties. Investing involves risk, including the possible loss of principal.

A message from Advisor Perspectives and VettaFi: To learn more on this and other topics, check out our full schedule of upcoming CE-approved virtual events.