Dennis Stattman runs the Blackrock Global Allocation Fund. In this interview with Fortune, he touches on a few interesting topics. We’ve discussed how the market trades on expectations numerous times on this blog, and Mr. Stattman says much the same thing in answer to a question about why he owns so many U.S. stocks:
…you don’t have to have a rip-roaring economy to have a good stock market. What you need is abundant liquidity, corporations that are able to react to the environment, and a belief on the part of investors that things are getting better, not worse. All of those things are in place.
Like many global investors, Mr. Stattman also believes that plenty of investment opportunities can be found overseas:
I do believe the fundamentals for economic growth are superior in developing economies. They have more citizens with unmet needs and the production capacity to shift from exports to domestic consumption.
Blackrock Global Allocation has had exemplary performance, but what I like most about it is how well it meshes with the Arrow DWA Tactical Fund. If you look at this efficient frontier, you can see that the historical combination of the two funds risk/return data has created a higher return and lower volatility than either fund alone. One of our most popular posts ever, it is certainly must reading for any advisor who currently owns Blackrock Global Allocation. This is a good demonstration of the power of combining a value approach with a relative strength approach, something that can often be done very successfully.
