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EWM Team

Nov 11
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Press Release: Endowment Index™ Historical Data Now Available Through Morningstar, Interactive Data and Bloomberg

By Endowment Index™, News

APPLETON, Wis., Nov. 11, 2014 /PRNewswire/

Historical index data for the Endowment Index™ — calculated by Nasdaq OMX® — is now available through major index and investment databases, including Bloomberg, Morningstar, and Interactive Data.  In addition, the 30,000+ advisors on the Envestnet platform can now select the Endowment Index™ to benchmark client portfolios. Endowment Index™ data can be accessed through most major quote providers and websites under the symbol “ENDOW.” The Index’s Morningstar ID is F00000TPG6.

The Endowment Index helps trustees, portfolio managers, consultants and advisors to endowments, foundations, trusts, defined benefit/defined contribution plans, pension plans and individual investors more appropriately track the performance of and analyze globally-diversified, multi-asset portfolios. The Endowment Index™ is an objective benchmark comprised of three major asset class building blocks: Global Equity, Global Fixed Income, and Alternatives, which includes hedge funds, private equity and real assets. The Endowment Index™ is a total return index and all underlying components are comprised of exchange-traded funds or other investable securities.  Endowment Wealth Management, Inc. in collaboration with ETF Model Solutions, LLC earlier this year launched the Endowment Index™ as a benchmarking tool for investors in globally-diversified, multi-asset portfolios that include alternative investments.

Endowment Wealth Management, Inc. is an independent Private Wealth Management Firm using a Multi-Client Family Office service model, whose mission is to grow wealth for individuals, families, retirement plans, endowments, foundations and other institutions through the utilization of the Endowment Investment Philosophy™.  EWM can construct index-based portfolios for investors based upon the Endowment Index™ asset allocation.

ETF Model Solutions, LLC, is third party investment manager and ETF strategist that builds investment models for 401(k) plans, Investment Advisors within their practice, Family Offices, Endowments, Foundations, Trusts, and Individual Investors.  The Firm is the fund manager for the Endowment Multi-Asset ETF Collective Investment Fund, available for use in 401(k) and other retirement plans.

Contact:
Prateek Mehrotra, MBA, CFA®, CAIA®
Email
920.785.6010
www.EndowmentWM.com or www.ETFModelSolutions.com

Disclosure:  You typically cannot invest directly in an index. Indexes do not contain fees.  Information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies, nor shall it be construed to be the provision of investment advice.  Investments involve risk and unless otherwise stated, are not insured or guaranteed. Be sure to consult with a qualified financial advisor and/or tax professional before implementing any investment strategies. While the firms are related and share corporate offices, Endowment Wealth Management, Inc. and ETF Model Solutions, LLC are each individually registered as an investment adviser in the State of Wisconsin. A copy of each firm’s respective disclosure document, Form ADV Brochure Part 2, is available upon request.

Link to Release

Nov 10
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Key Findings from a recent Hedge Fund Industry Report as of September-2014

By Alternative Investments

Highlights from a recent hedge fund industry report:

  • 65% of hedge fund industry capital comes from institutional investors.
  • 4,600 institutional investors allocate capital to hedge funds.
  • Regional breakdown of allocators are as follows: 54% USA, 27% Europe, 7% Asia, 5% Middle East, 4% Canada, 3% ROW.
  • 87% of investors are maintaining or increasing their allocations to hedge funds in the next 12 months.
  • When asked what they’re looking for from hedge funds, 59% are seeking uncorrelated returns, 56% are seeking risk-adjusted returns, 46% seek reduced portfolio volatility, 7% are seeking high returns.
  • 84% of institutional investors feel return expectations have been met or exceeded in the past 12 months.
  • 80% of institutional investors believe portfolio risk would increase if they ceased investing in hedge funds.
  • When bench-marking performance, investors believe traditional benchmarks such as the S&P 500 are irrelevant, preferring to use strategy-specific hedge fund indices to measure performance.
  • Mean allocation to hedge funds by investor type: Endowment = 19%, Family Office = 20.3%, Foundation = 17.6%, Insurance Company = 2.3%, Private Sector Pension = 10.5%, Public Sector Pension = 7.7%, Sovereign Wealth = 7.0%.
  • Largest impediment to investing in hedge funds: difficult to source good funds was cited by 23% of institutional investors.
  • 67% of investors seek annualized returns of between 4% and 6%.
  • 3% seek returns of 10%, another 3% seek returns in excess of 10%.
  • 4% of investors plan to reduce their hedge fund exposure in the next 12 months whereas 19% believe they’ll increase and 68% suggested no change.
  • In Q3-2014, 179 new hedge funds launched, up 11% versus Q2-2014.

(Source: Prequin)

Oct 29
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Federal Reserve ends it’s QE program today

By General

Fed made the following historic announcement today:

  • QE program would end at month end
  • Fed will keep reinvesting principal payments from its holdings to maintain its balance sheet at approx. $4.4 trillion
  • The QE program had met the Federal Reserve’s goal of reducing unemployment
  • Acknowledged that the labor market slack is “gradually diminishing”
  • Assured its support of low interest rates for a considerable period of time, unless the economic data improves faster than its forecast
  • Pointed to short-term downside risk to inflation
  • Future rate hikes will depend on the pace of improvement in the job market

Fed Balance Sheet

(Source: WSJ, Fed)

 

Oct 28
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How To Invest Like The Ivy League Endowments with ETFs

By Alternative Investments, ETF Related

Seeking Alpha published an article by Prateek Mehrotra outlining how ETFs can help investors build institutional quality portfolios diversified into liquid alternative investments designed to improve long-term risk adjusted returns. The article summary

  • The country’s largest endowments aim to preserve capital while producing income and appreciation with less correlation to the stock market regardless of market conditions.
  • Performance among Ivy League endowments and retirement plans that invest like them varied widely last year but in the long run, they posted stellar risk-adjusted returns.
  • You can invest like an Ivy League endowment yourself with a basket of ETFs offering exposure to all of the major asset classes in their portfolios.

The entire article can be read on the Seeking Alpha website.

Oct 22
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U.S. CPI under 2% and poised to cool off

By Inflation Watch

The Labor Department on Wednesday reported that its consumer-price index rose 0.1% in September from August, as did the core CPI, which excludes food and energy prices. That put both measures up just 1.7% from a year ago.

Credit Suisse estimates that as a result of falling gasoline prices, by the end of the first quarter the CPI will be up less than 1% versus year earlier, all else being equal.

One place there has been inflation is shelter costs, which is primarily rent and imputed rent—what people would pay if they rented the home they own. These were up 3% in September from a year earlier. Absent them, core prices rose a scant 0.9% year over year. Owners Equivalent Rent is the big gorilla in the inflation room. It accounts for 24% of the total CPI and 31% of the core. So why isn’t the accelerating OER rate pushing up the core? Because other factors are offsetting the upward push.

The biggest drag is the downward pressure on goods prices coming from overseas.

Policy makers and economy-watchers now seem more worried about disinflation rather than accelerating inflation. That wasn’t the expectation at the start of the year. In January, economists surveyed by The Wall Street Journal expected inflation–measured by the consumer price index–would end 2014 at a 2.3% annual rate, up from the 1.5% rate of 2013.

(Source: WSJ, BLS)

Oct 16
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Endowment Wealth Management Records New Radio Spot Discussing Retirement

By News

Rob Riedl, Director of Wealth Management at Endowment Wealth Management talks about 61% of Americans without a retirement plan should develop a road map to help them to their retirement destination in a new radio spot running the week of October 13, 2014 on WHBY 1150, a radio station dedicated to news, sports and talk programming in the Appleton, Green Bay and Fox Cities area.

Click to listen:  EWM-Radio-Rob-Riedl-on-Retirement-2014.10.13

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Robert Riedl, CPA, CFP®, AWMA®

Oct 13
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Great quote for today’s markets
Oct 10
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A Macro View – Volatility Spike

By General

Quite the week it has been. For much of the year, we have been recommending that periods of market placidity should be used as precious opportunities to assess and re- position. Those benign times are when changes are best made, but of course, human nature being what it is, those times are also when it feels less urgent to make such changes.

Now we have been greeted with volatility, and then some. One to two percent moves daily in stocks; currencies globally declining with the dollar strengthening; and sovereign yields dropping with negative cascade effects on emerging-market and high-yield instruments. Some of these sharp moves may have been triggered by warnings from the IMF that Europe was on the edge of another dip into recession and that global growth is weakening. Some may be a product of continued digestion of the end of quantitative easing by the Fed. And some may be a nervous environment in the face of multiple global concerns such as Ebola spreading and ISIS advancing.

Next week, market attention will turn to the slew of third quarter earnings, which will likely offer some decent upside surprises akin to what we saw in July. Even so, once markets plunge into volatility, it takes a while to subside. We have had a few bouts this year already, early in the year and again in August, and the past week felt even more substantial. While the S&P 500 has only declined about 5% from highs, other areas of the market are much, much weaker, especially small-cap stocks (as measured by the Russell 2000 Index) which are already in correction and are off in excess of 10% from their highs. While this is not an optimal time to trade and react (unless you are a trader…), it may be a time to dip into sectors or asset classes that seemed too pricey only a few months back. The operative word is dip, given that what now looks less expensive may of course be less expensive still if the current downtrend continues.

Still, this sell-off and global market unease has not been triggered by any clear or radical deterioration, or by a sudden unexpected shift in anything other than sentiment. That matters, as absent genuine crisis, markets will sooner or later follow underlying fundamentals, especially stocks. Those fundamentals may not be stellar (and have not been at any point in the past few years), but they are hardly terrible. Markets can detach from that for a while, but not completely.