On Wednesday, November 13th, 2024 at 3:00 PM ET, Burney Advisor Services participated in a VettaFi webinar featuring three prominent investment professionals sharing battle-tested insights from decades in the markets.
Get access to the full webinar by clicking here.
Hosted by Kirsten Chang, Senior Industry Analyst at VettaFi, and moderated by our Senior Managing Director Wayne Ferbert, the webinar brought together Chuck Clough of Clough Capital (former Merrill Lynch Chief Global Strategist), Jason Hsu of Rayliant Global Advisors (a pioneer in international investing), and our own President and Chairman Lowell Pratt Jr, CFA.
Together, they explored how investment management has evolved and where markets are headed. Below are the takeaways from the webinar, Evolution of Investing: Three CIO Perspectives on Five Decades of Change.
Technology’s Impact on Investment Management
The transformation of investment technology took center stage early in the discussion. The panel shared how technology revolutionized their approach:
- Jason Hsu described the leap from basic Excel models to AI-driven analysis, where machine learning simultaneously processes hundreds of market factors
- Lowell Pratt traced Burney's evolution from Jack Burney's pioneering use of slide rules to today's sophisticated modeling systems that identify key drivers of excess returns
- Chuck Clough brought a unique perspective with his creation of Merrill Lynch's original "squawk box," an early innovation that transformed Wall Street communication before the digital age
Navigating Market Disruptions
Each CIO offered distinctive insights on market storms, shaped by battles won and lost:
- Chuck Clough explained how the Federal Reserve's expanded toolkit and swift response capabilities have created new safeguards against traditional recession triggers
- Jason Hsu zeroed in on demographic shifts as an overlooked threat, warning that 30,000 daily Western retirees could trigger unprecedented inflationary pressures
- Lowell Pratt revealed how Burney transforms market chaos into opportunity through systematic strategies designed to capitalize on volatility
Hard-Won Lessons
In perhaps the most compelling segment, each leader shared their costliest mistakes and resulting innovations:
- Jason Hsu's GameStop short taught him that markets could defy logic longer than portfolios can sustain losses, leading to stricter position limits and a renewed focus on long-term fundamentals
- Chuck Clough acknowledged holding too firmly to value investing during the growth stock boom, spurring the development of more adaptive portfolio management techniques
- Lowell Pratt detailed how late-1990s challenges sparked Burney's size and style-responsive approach, demonstrating how adversity often drives innovation
The ETF Revolution
A key focus of the discussion was the growing dominance of ETFs, with moderator Wayne Ferbert noting that ETFs have attracted $1.4 trillion in net new assets this year alone, including $200 billion in October. Our panel shared their motivations for embracing active ETFs:
- Chuck Clough highlighted the transition from tax-inefficient mutual funds to ETFs, emphasizing opportunities in secondary markets
- Lowell Pratt described Burney's 2022 ETF launch, which enabled $120M in tax-free SMA conversions and enhanced the firm's 130/30 strategy
- Jason Hsu focused on making international and emerging markets more accessible while maintaining active management advantages in inefficient markets, particularly in retail-heavy markets like Taiwan and mainland China
A New Partnership
The discussion culminated with an exciting announcement: Burney Advisor Services, Clough Capital, and Rayliant have partnered to launch "Powered by ETFs" - a comprehensive asset allocation model that combines the strengths of all three firms. Available at PoweredbyETFs.com, this solution offers active management that combines quantitative and fundamental analysis, with portfolio changes managed by the firms rather than requiring advisor intervention. Additionally, advisors who meet certain minimums will receive complimentary access to Burney's OCIO services, including research, daily market commentary, and insights from all three firms.
Tomorrow's Markets
Looking ahead, Lowell Pratt balanced optimism with pragmatism. Rather than making broad market predictions, he emphasized the importance of identifying specific opportunities while maintaining flexibility in asset allocation.
Moving Forward Through Investment Management
The discussion was a powerful reminder that markets never stop evolving, and neither should investment management approaches. The insights shared by these veteran CIOs - from technological transformation to demographic shifts, from market disruptions to hard-won lessons - demonstrate the value of combining proven principles with adaptive strategies.
The webinar also marked an exciting milestone in Burney's own evolution, as we announced our new partnership with Clough Capital and Rayliant. Moving forward, we will share more information about how this exciting collaboration will serve our clients and investment community.
Have questions about the discussion or our approach to investment management? Connect with us.
Important Disclosures:
2. Investing involves risk. Principal loss is possible..
3. The Fund is distributed by Quasar Distributors, LLC.
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