Katherine Gross, National Accounts Manager for Richard Bernstein Advisors, joined Keith Black, Managing Director of RIA Channel, to discuss RBA’s ‘pactive’ approach to investing, investment opportunities and allocation consideration.
Richard Bernstein Advisors coined the term “pactive,” meaning a manager who actively invests using passive products. The firm is a top-down fundamentals manager evaluating global bonds, stocks, and industries on measures of profit, liquidity, sentiment, and valuation. RBA works with advisors to integrate up to six ETF-based SMAs into their practice, including equity-only, fixed-income only, and multi-asset portfolios.
Profits can be cyclical across industries and geographies, which has led Richard Bernstein Advisors to recently overweight international stocks for the first time in the firm’s history. While profits of US corporates have peaked and are decelerating, the opposite situation is now occurring in China, where profits are growing off of a cyclical trough.
While the investment selection process is actively managed, the portfolios are built using between 10 and 25 passive ETFs. The portfolio management team evaluates the holdings in each ETF to ensure that each fund accurately expresses the firm’s view on the identified investment theme.
Resources:
Global Risk-Balanced Moderate ETF Strategy