Review Magazine November 2017

REVIEW NOVEMBER 2017 WWW.ASSETTV.COM

THE FUTURE OF INTERNATIONAL INVESTING Capital Group’s Jody Jonsson on the Importance of Global Flexibility in Portfolio Construction

PLUS INSIDE:

Nuveen An Eye on Tax Reform

PIMCO Security in Uncertain Times

November 2017 | REVIEW ASSET TV | 1

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EDITOR’S NOTE

CONTENTS

While markets have yet to witness much volatility this year, the world is hardly complacent about its future.

Gillian Kemmerer Head of Programming Asset TV

A wave of populism across the globe has installed leaders hellbent on nationalism and change. The U.K. is plotting its tumultuous departure from the European Union, while Catalonia is fighting for its entry as an autonomous state. China’s President Xi Jinping is extolling the values of free trade, while President Donald Trump is dismantling major tenets of NAFTA. In a world so geopolitically charged, the need for trustworthy information is profound. That is why I am proud to present you with the latest content from Asset TV, a platform that has been dedicated to research and education since its inception.

Take a look at our latest programming — from opportunities in international investing to the future of the Fed — and please do not hesitate to get in touch if there is something else you would like to see. We endeavor to foster closer relationships with our viewers, and look forward to hearing your valuable feedback.

A New Perspective on Global Investments

4-5

An Eye on Washington

6-7

Security in Uncertain Times

8-9

Capital Group on Globalization and Investing Featuring Nuveen Featuring PIMCO

Opportunities in New Places

10-11

Benchmarking for Success

12-13

Reframing the Discussion

14-15

The Leaderboard

16-17

Featuring VanEck

Featuring S&P Dow Jones Indices

Featuring Columbia Threadneedle The Most Watched People on Asset TV

The Rise of Emerging Markets 18-19 An Outlook for the Asset Class

Insights on Target Date Funds

20-21

China Takes Center Stage

22-23

A Preview of Davos 2018

24-25

MASTERCLASS

26-27

HOT SEAT

28-29

The Fast-Growing Target Date Market

Sincerely yours,

How China Became a Global Player Asset TV Prepares for Davos Coverage ASSET TV REVIEW IS PUBLISHED FOR INVESTMENT PROFESSIONALS. No part of this publication may be reproduced without the prior permission of Asset TV Inc. Information, views and opinions contained in the articles have been compiled from interviews conducted by or hosted on Asset TV with regulated fund managers and other investment professionals. Asset TV Inc. accepts no liability for any loss arising from the use hereof nor makes any representation as to their accuracy or completeness. Whilst every care has been taken in preparing Asset TV Review, neither Asset TV inc. nor the authorities can accept responsibility for any errors it may contain or for any losses from or in reliance upon its contents.

Highlights From Our Flagship Series With Deutsche Bank and MetLife

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November 2017 | REVIEW ASSET TV | 3

FROM THE COVER

A NEW PERSPECTIVE ON GLOBAL INVESTING Your equity portfolio may be more global than you think. Where a company generates sales, rather than where it is domiciled, is a key component of portfolio allocation and investment choice.

Jody Jonsson I believe global flexibility is crucial to designing a “future-proof” portfolio amid the changing dynamics of business and trade.

The notion of global investing is not what it used to be just 10 years ago.

Rapid advancements in technology, free trade agreements and the rise of multinationals in emerging markets have transformed the structure of the economic world today, allowing companies to compete for customers, labor and capital on a global basis. These profound shifts have changed ways of thinking about global investing, not only in terms of opportunities but also portfolio allocation decisions.

Rather than dividing portfolios in regional slices,

Welcome to the New Geography Globalization and an increase in open trade are having significant impacts on the universe of investment opportunities, meaning that companies headquartered in Europe, Japan and the U.S. don’t necessarily generate most of their revenue in their home country like they once used to.

A review of S&P 500 company revenues shows that about 37% is derived from outside the U.S. Meanwhile, the 10 largest companies in the MSCI Europe Index get approximately 69% of revenues from outside Europe.

So when considering how much of your portfolio is exposed to the global economy, I’ve found that digging into where a company generates its revenue is a much more practical and transparent yardstick, rather than relying on an index structured around domicile or country.

As a bottom-up investor, I use this approach to broaden the opportunity set of investment choices. It gives me the flexibility to look across a global industry and select the companies that I believe are best positioned for growth, regardless of their location.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. Securities offered through American Funds Distributors, Inc.

4 | REVIEW ASSET TV | November 2017

REVIEW INVESTING IN EUROPE MEANS INVESTING GLOBALLY

Revenue exposure of top 10 companies in the MSCI Europe Index

Sources: MSCI, RIMES. Revenue exposure of the top 10 companies in the MSCI Europe Index by market cap, as of December 31, 2016.

From Goods to Gigabytes If the 20th century was defined by a phenomenal rise in the transfer of goods and industrial commodities, the 21st century is being characterized by the rapid digitization of services and the increasing automation of manufacturing. With the internet, there are no real borders, which creates paradigm shifts in the way companies are organized and in how products are consumed.

The knowledge economy, or digital trade, is gaining momentum, and this is giving rise to a new breed of global giants that are “idea” companies — think Amazon or Alphabet (Google’s parent). These companies are creative, nimble and networked, leveraging technology to their advantage.

“

Globalization Is Here to Stay Despite recent protectionist rhetoric, it’s hard to see globalization reversing: It’s embedded in the way many

companies do business, supply chains are set up and products are manufactured. Apple’s supply chain, for instance, spans 30 countries. Moreover, many established multinationals like Unilever, Nestlé and Coca-Cola have been moving closer to end markets to gain a deeper understanding of local markets.

Moving forward, we are likely to see global trade patterns evolve with the increasing digitization of commerce and the likelihood of new trade, tariff and tax structures in many parts of the world.

Fundamental research will be key to identifying potential winners in this environment.

Having invested in global companies for nearly three decades, I’ve found that successful multinational companies typically have innovative management teams, diverse sources of revenue and resilient balance sheets. These are the attributes I will be looking for as globalization enters a new era.

When considering how much of your portfolio is exposed to the global economy, digging into where a company generates its revenue is a much more transparent yardstick, rather than relying on an index structured around domicile or country.”

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and not to be comprehensive or to provide advice. Any reference to a company, product or service does not constitute endorsement or recommendation for purchase and should not be considered investment advice.

November 2017 | REVIEW ASSET TV | 5

CHANNEL SPOTLIGHT

AN EYE ON WASHINGTON

Nuveen is at the forefront of the major fiscal issues impacting U.S. investors. From the promise of corporate tax reform to changes in the U.S. financial sector, Nuveen is putting their diverse knowledge base to work.

MUNICIPAL MARKETS STRENGTHEN INTEREST RATES AND AS THE YEAR PROGRESSES SMALL CAPS John Miller Managing Director and Co-Head of Fixed Income

Karen Bowie Senior Vice President and Portfolio Manager

“Munis are still the lynchpin of financing our country’s infrastructure and they need that tax-exempt status to maintain the demand to maintain the issuance. And the issuance goes to projects — schools, hospitals, roads, airports, just to name a few.”

“As you look back since the recession, with rates coming down dramatically, we’ve seen a lot of companies refinance. And so they’ve taken advantage of this lower rate environment, which has been extremely positive from that standpoint.”

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REVIEW INCOME INVESTING NOW: KEY THEMES FOR TODAY’S DYNAMIC MARKET Stephen Liberatore Managing Director and Fixed Income Portfolio Manager TIAA Investments

“I think what most market participants are focused on really is this concept of a transformational tax reform package. And I think that has been the primary focus of just about every market participant. And they’ve really shrugged off a lot of these geopolitical concerns, which I think is a mistake.”

POLITICAL ISSUES INVESTORS SHOULD WATCH

U.S. BANKS PREFERRED SECURITIES UPDATE

Bob Doll Senior Portfolio Manager and Chief Equity Strategist

Brenda Langenfeld Senior Vice President and Portfolio Manager

“People thought healthcare was hard and tax cuts are going to be easy. It’s all hard because every senator — every representative — has a different constituency and they’re marching to that drumbeat.”

“We expect to maintain these historically high capital levels, and don’t expect to see the growth in capital that we’ve seen since the financial crisis. This also means that we don’t expect to see meaningful net new issuance supply in the preferred space out of the U.S. bank sector.”

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CHANNEL SPOTLIGHT

SECURITY IN UNCERTAIN TIMES Whether it is a rising rate environment, a bear stock market, geopolitical unrest or a recession, fixed income offers investors an opportunity to reduce risk and even generate alpha, according to PIMCO.

REDUCING RISK, NOT STANDING STILL

PREPARING FOR THE NEXT RECESSION

Dan Ivascyn Group Chief Investment Officer

Joachim Fels Global Economic Advisor

“What we want to do across portfolios is be active in these areas, remain close to fully invested but in instruments that would weather these periods of dislocation — perhaps recession — well, relative to other alternatives. The ultimate goal [is] to protect clients’ principals during difficult market environments and be able to go on the offense when valuations give us significant opportunities.”

“While the timing of the next recession is highly uncertain, investors should start preparing for it. There are a few things investors can do. First of all, the focus should really be on capital preservation. It’s very much about the return of capital rather than the return on capital. The second thing investors should keep in mind is that it’s good to have an allocation to assets like government bonds.”

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REVIEW MASTERCLASS: BONDS ARE DIFFERENT Helen Guo Quantitative Research Analyst

“These two concepts are usually associated with the insurance industry, so adverse selection is a situation or phenomenon, where due to asymmetric information, the bad risk such as a bad driver may be more likely than good risk to buy insurance.”

SEEKING ALPHA AMID LOW YIELDS BREXIT ONE YEAR ON: IN TODAY’S CORE BOND MARKET WHERE ARE WE? Scott Mather Chief Investment Officer, U.S. Core Strategies

Mike Amey Managing Director and Portfolio Manager

“Rising rates can present some risks. Generally, rising rates are really a fixed income investor’s — especially an active fixed income investor’s — friend. There are lots of ways to be defensive in the portfolio to protect against some of the capital losses that can occur when [in] a rising state environment, while still taking advantage of the fact that yields are higher.”

“I think we all have to recognize that in the first year we haven’t gotten that much more clarity than we had 12 months ago and the clock is running. So I think the biggest risk for the U.K. really is that we just run out of time and the deal isn’t done within this relatively short period and therefore you get quite a disruptive outcome.”

November 2017 | REVIEW ASSET TV | 9

CHANNEL SPOTLIGHT

OPPORTUNITIES IN UNIQUE PLACES

Since founding, VanEck has always sought out investment opportunities in new markets ahead of the industry. The firm continues the tradition with America’s first green bond ETF and its NDR Managed Allocation Fund.

VANECK NDR MANAGED ALLOCATION FUND CELEBRATES MILESTONE ANNIVERSARY

GOLD POISED TO FINISH 2017 STRONG

David Schassler Portfolio Manager

Joe Foster Portfolio Manager

“We follow a rules-based discipline that incorporates macroeconomic, fundamental, and technical research.

This is done using an objective, data-driven approach; we take the emotion out of investing. The fund has definitely performed in line with our expectations.”

“Gold has been supported by a weakening dollar and by geopolitical issues around the world, and we expect those catalysts to continue for the remainder of the year for gold. In addition to that, there are a couple of other things we’re looking at. One is what the Fed is doing. First of all, if the Fed doesn’t raise rates later in the year, that could put more pressure on the dollar.”

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REVIEW MASTERCLASS: RESPONSIBLE INVESTING

William Sokol Product Manager

“I think there is this perception that ESG investing means to just wholesale exclude entire parts of the market. I think there’s a lot of education to be done on the ways that you can invest responsibly, where you don’t necessarily need to do that.

You don’t need to necessarily stray from your benchmark.”

ISRAEL: STRONG ECONOMY UNDER ALLOCATED BY MAJOR INDICES

MACRO AND FUNDAMENTAL BACKDROP SIGNAL STRENGTH IN EMERGING MARKETS EQUITY

Steven Schoenfeld Founder and Chief Investment Officer, BlueStar Indexes

David Semple Portfolio Manager

“Even though Israel is a small country geographically, it punches way above its weight in the global markets…. As far as an allocation, Israel has over the last few years become unintentionally underweight in most investors’ portfolios.”

“What we have now and we have for the last year is a really significant pick up in operating profitability, and we have seen a substantial downturn in terms of capex because we don’t need as much capex as before. So if you have operating profitability picking up and less money going into capex, that means you have much more free cash flow.”

November 2017 | REVIEW ASSET TV | 11

CHANNEL SPOTLIGHT

BENCHMARKING FOR SUCCESS

Data is the foundation of how S&P Dow Jones Indices reaches smart and informed investment conclusions. From the use of factors to insights on different asset classes, they serve as a leading source of research and education.

Q3 EARNINGS SEASON: CONNECTING THE DOTS

QUALITY IN SMALL CAPS: A CLOSER LOOK

Howard Silverblatt Senior Industry Analyst

Aye Soe Managing Director, Global Research and Design, Americas

“It’s not just how many of us will be watching on our new Apples, but all of those electronic toys for the kids and the grownups. Technology is the largest sector — making up 23 percent of the index.

It contributes 16 percent of the dividends and it is expected to contribute 23 percent to the earnings.”

“The small cap space is very fascinating for the quality factor. When you look at large cap or mid cap versus small cap, quality is a major driver of returns in small cap. For example, the quality dispersion in small cap is much larger than what you would find in the large cap space.”

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REVIEW BENCHMARKING REAL ASSETS

Jodie Gunzberg Managing Director, Product Management

“Defining what real assets are is challenging.

It’s not as clearcut as why people use real assets, which is generally inflation protection and diversification, but what they are is a very broad set of what we’ve defined as property, infrastructure, natural resources and inflation bonds.”

DIVIDEND ARISTOCRATS IN VOLATILE MARKETS

FACTORS: WHAT’S BEHIND THE NUMBERS?

Joe Kairen Senior Director, Strategy and Volatility Indices

Lindsey Bell Investment Strategist CFRA, Equity and Fund Research

“If you look at the 15 worst months for the S&P 500, on average it’s about minus 7.6 percent. The Dividend Aristocrats actually has a 200-basis point upside to that, so it’s minus 5.6 [percent]. So inherently right there, you are already protected from drawdowns or down markets.”

“Looking at the different factors that S&P has to offer, you’ll notice that growth and low volatility indices have led so far this year from a price performance perspective. And then P/E basis growth is certainly overvalued versus the S&P 500 overall, as well the other factors and indices.”

November 2017 | REVIEW ASSET TV | 13

CHANNEL SPOTLIGHT

REFRAMING THE DISCUSSION

While the rest of the world debates active vs. passive, Columbia Threadneedle’s response is “why not both?” The firm even goes a step further with new ideas on diversification, volatility, ESG and fixed income.

A CHANGE IN INVESTMENT PRICING TRANSPARENCY

BEYOND TRADITIONAL DIVERSIFICATION

Colin Moore Global Chief Investment Officer

Jeff Knight Global Head of Investment Solutions

“It is a really big debate at the moment, on active versus passive. Most of those framing the discussion tend to think that it can be one or the other. We have tried to reframe the discussion into active and passive because I think they each have their role.”

“So the idea of adaptive allocation is one that embraces the concepts of diversification, and being centered and balanced most of the time, but also recognizes that that’s not a strategy that always gives you the best results.”

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REVIEW MANAGING INCOME IN A NEW RATE REGIME

Ed Kerschner Chief Portfolio Strategist

“With yields on bonds at near historic lows… I think it’s important to understand in the bond market it’s about more than interest rates.

There’s credit risk, there’s currency risk, there’s inflation risk. If you can analyze these factors appropriately, there’s actually opportunity.”

WHAT ARE EQUITY INVESTORS’ WORST MISTAKES?

THE EVOLUTION OF ESG

Melda Mergen Head of Equities

Marc Zeitoun Head of Strategic Beta

“Being in the market by buying an index means that you’re exposed to full volatility of the equity markets, but you can actually pick an active strategy where there’s better downside protection, and that way you actually match your needs with the outcome of your equity strategy.”

“ESG we have found shouldn’t necessarily be the core focus of the portfolio, as much as it’s an important attribute in generating a good outcome. Because in the end we’re talking about a company with a conscience, and that’s well run, and that makes good business.”

November 2017 | REVIEW ASSET TV | 15

ASSET TV LEADERBOARD

THE ALL STARS

These financial experts have hit it out of the park this quarter, scoring home runs with their original content and insightful market commentary. Check out the roster of the most-watched faces on Asset TV.

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FEATURED ON ASSET TV

THE RISE OF EMERGING MARKETS Emerging markets outperformed their developed counterparts in 2017, and investors believe that there’s plenty more to come from the developing world. Propelled by the global economic recovery, emerging markets seem poised to continue their earnings growth in the coming months.

A STRONG REBOUND FOR EMERGING MARKETS

REASONS TO LOOK BEYOND U.S. STOCKS TODAY

Patricia Ribeiro - Vice President and Senior Portfolio Manager at American Century Investments

Anwiti Bahuguna - Senior Portfolio Manager at Columbia Threadneedle Investments

“We continue to see earnings acceleration and improvement in earnings growth going forward.

Inflation in general, broadly speaking in emerging markets, is also coming down — so that’s another very positive trend.”

“This year we have seen growth signals coming out of Europe, improvement of growth in the emerging markets, and we think it makes sense to begin investing in international stocks and take advantage of the growth and valuation options we have available globally.”

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INVESTMENT OUTLOOK: EMERGING MARKETS RALLY EMERGING MARKETS AND DIGITAL RIDING ON EARNINGS GROWTH ASSET OPPORTUNITIES

Jan van Eck - Chief Executive Officer at VanEck

Shaw Wagener - Portfolio Manager at Capital Group

“EM underperformed the U.S. for five years. Now, in 2017, you see that their earnings are growing — company profits are growing at the highest rates since 2011. It’s really attractive. That’s driven the 20 percent plus returns in emerging markets so far this year. We think it’s just the beginning of a cycle.”

“A good economy globally is a good deal for emerging markets. That’s been true in the past, and I would expect it to be true in the future. When the economies of the world are doing well, it means that trade is doing well, so there’s a lot of movement of goods and services.”

DIVIDENDS IN EMERGING MARKETS

EMERGING MARKETS PRESENT A COMPELLING OPPORTUNITY

Rahul Sharma - Executive Director and Portfolio Manager at Schafer Cullen Capital Management

Michael Gomez - Head of Emerging Markets Portfolio Management at PIMCO

“The dividend universe is growing dramatically in emerging markets. I think this is really a secret to investors. In fact, as a percentage of companies, there is now more dividend paying companies in emerging markets then there are in developed markets.”

“These are a group of countries that have undergone a great deal of adjustment in terms of their policies over the last couple of years, and that’s now starting to bear fruit. It’s bearing fruit in the form of stronger economic growth, a healthier balance payments profile, and inflation that is starting to come down more towards developed market types of levels.”

November 2017 | REVIEW ASSET TV | 19

FEATURED ON ASSET TV

INSIGHTS ON TARGET DATE FUNDS Executives from BlackRock, Fidelity Investments, Mercer Investments, Natixis Global Asset Management, TIAA Investments and Wilshire Associates provide insights into the fast-growing target date market.

ADVANTAGES AND DISADVANTAGES THE TARGET DATE ENVIRONMENT OF TARGET DATE FUNDS Ruthann Pritchard - Institutional Portfolio Manager at Fidelity Investments

Ed Farrington - Executive Vice President at Natixis Global Asset Management

“If you can get a participant in the plan saving meaningfully with a good strong plan design from the plan sponsor, and you give them the right asset allocation, that’s 90 percent of the battle. But to the point that was made earlier, personalization really is the next wave in the target date industry.”

“They’ve just worked 40 years and they’re finally at this point where they can spend some time and spend their savings in a way that allows them to have the life that they envisioned... so it’s why we haven’t seen the movement from… ‘to’ target date into the ‘through’ target date retirement glide path conversation.”

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MASTERCLASS: TARGET DATE FUNDS

MASTERCLASS: DEFINED CONTRIBUTION

Nathan Palmer - Managing Director at Wilshire Associates

Nick Nefouse - Head of DC Investment and Product Strategy at BlackRock

THE FUTURE OF TARGET DATE FUNDS

TO VERSUS THROUGH

Peter Grant - Principal at Mercer Investments

John Cunniff - Portfolio Manager at TIAA Investments

“The idea of getting alpha opportunities or higher returning classes, like private market securities into the target date funds still makes sense, because target date funds are going to be around a long time. And we want to be sure we’re bringing the greatest amount of return we can to participants in those plans.”

“When you go ‘through’ retirement, you’re able to glide in a little bit higher and then bring it down as the individual ages ‘through’ retirement. It’s really balancing market risk, interest rate risk, inflation risk, longevity risk, looking at savings assumptions that are realistic and going ‘through’ the whole life that way.

That’s how we arrived at ‘through’ retirement.”

“Another stat that comes out is basically that half of plan sponsors think that passive investments are less risky than the market. And we also asked participants that same question, and 65 percent of participants think it’s less risky than the market. By definition it is not less risky, it is the market.”

“I think that what target date funds have done is… an incredible job getting people to invest and keeping them invested over time to earn those capital market returns. We just need more people in there investing.

We need more access to 401(k) or 401(k) type plans further down the market.”

November 2017 | REVIEW ASSET TV | 21

FEATURED ON ASSET TV

CHINA TAKES CENTER STAGE Economic liberalization has transformed China into an attractive investment opportunity. As China’s market becomes more servicebased, global investors are turning their attention to the world’s second largest economy.

NOTES FROM SHENZHEN: CHINA’S HARNESSING CHINA’S ECONOMIC GROWTH SILICON VALLEY Shaw Wagener - Portfolio Manager at Capital Group

Vincent Chen - Head of Index and Quantitative Investment at ICBC Credit Suisse Asset Management

“There are obviously large manufacturing facilities in China, and so just like Japan, we’re expecting China to incorporate robots. Up until now, a lot of the robots they buy have been coming from Japanese companies or European companies. Well, increasingly you have domestic companies that are very competitive.”

“I think as China’s weighting in global equity benchmarks continues to grow, more and more global investors will increase their allocations for China as an asset class.”

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OPPORTUNITIES IN INTERNATIONAL INVESTING

CHINA: AN INTRIGUING OPPORTUNITY

Di Zhou - Managing Director and Portfolio Manager at Thornburg Investment Management

Luke Oliver - Head of ETF Capital Markets at Deutsche Asset Management

“China, as the second largest economy in the world, plays a significant influence in the global economy — and it’s something that we always pay attention to regardless of how much investment we have in China in the strategy.”

“China is now the second largest economy in the world. That itself reflects a big opportunity set driven by a move to a more serviced-based economy.

Services now account for about half of the country’s GDP.”

FUNDAMENTALS IN CHINA – HOW DO COMMODITIES RESPOND?

EMERGING MARKETS: HUGE OPPORTUNITY TO GENERATE ALPHA

Erik Norland - Executive Director and Senior Economist at CME Group

Rahul Chadha - Portfolio Manager and Co-Chief Investment Officer at Mirae Asset Global Investments

“China has relatively young fixed income markets.

It’s only been a little bit over a dozen years since the Chinese government has been issuing benchmark bonds at various maturities.”

“I wouldn’t be surprised if China, which is today 28 percent of the EM benchmark, goes up to 40 to 45 percent in the next five years. So, I think that investors ignore China at their own peril.”

November 2017 | REVIEW ASSET TV | 23

CONFERENCE INSIGHTS Previewing the World Economic Forum Annual Meeting in Davos from January 23-26, 2018

DAVOS LOOKS TO CREATE A SHARED FUTURE

BY GILLIAN KEMMERER

Each year, the global intelligentsia gather in Davos, Switzerland for the public spectacle that is the World Economic Forum’s Annual Meeting. Asset TV will be on the ground to bring you the latest news and analysis.

“We should recede from our respective national positions, and embark on the right pathway towards economic globalization at the right pace.”

sentiments? Former President Barack

dissidents? That scenario may have

Obama, Canadian Prime Minister Justin

seemed totally implausible — even

Trudeau, and a slew of trade-touting

laughable — several years ago.

If asked to identify the quote above,

the words above, and proceeded to

I remember standing in the center of

to whom would you attribute its

defend free trade in a sea of Western

the Congress Hall lobby as President Xi

Ivy League academics might come to mind. What if, instead, I told you

But certainly not after Davos.

that Chinese President Xi Jinping said

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REVIEW Jinping delivered his hallmark address at the World Economic Forum Annual Meeting 2017 in Davos. Minutes prior, IMF Chief Christine Lagarde could be seen sipping espresso with Bloomberg Television’s Tom Keene. Bridgewater founder Ray Dalio, flanked by admirers, was walking purposefully to the main hall. Everything seemed as it had always been — a melange of the world’s most visible public and private sector leaders, coming together to strike secretive agreements that would be far more interesting than widely-telegraphed comments in the conference hall.

But this time, it was different. As President Xi extolled the values of free trade and international collaboration — values not commonly assigned to a centrally-planned economy — President-elect Donald Trump was preparing a bombastic inaugural speech that would mark the start of America’s retreat from globalism. Prime Minister Theresa May would address Davos later in the week, defending her country’s surprise decision to leave the European Union.

“Xi is the only adult in the room,” one Davos attendee quipped.

Last year marked a dynamic shift in the tone of the Forum’s messaging; Western leaders grappled with the rise of

“TRADE CAN BE A FORCE FOR GOOD” Dr. Mukhisa Kituyi, Secretary - General of the United Nations Conference on Trade and Development (UNCTAD) “We have to talk about how we can make coherence between trade policies and investment policies. If we just facilitate movement of goods, you can only be opening up markets for cheap imports from East Asia perhaps. And what you need to do is, pari passu, to make trade simpler. Trade can help people build a capacity to produce something competitively for counter-trading.”

populism, while China stepped forward as a proponent of free trade. Attendees seemed shell-shocked, even a bit wounded. The cosmopolitan view of the world so prevalent in these halls was suddenly under siege.

This year, Davos will dust off its shoulders and look to forge unity in an uncertain geopolitical landscape. The theme of this year’s forum is “Creating a Shared Future in a Fractured World,” and will call on 2,500 participants from over 100 countries to find collective solutions to global challenges. I look forward to delivering the most important insights from the conference to your inbox, with in-depth interviews that challenge key stakeholders to explain how the global financial community will be impacted by the Davos conversation.

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MASTERCLASS

MASTERCLASS: SELF DIRECTED IRA Self-directed IRAs place retirees in the driver’s seat when it comes to managing their outcomes, and offer a range of opportunities unavailable to traditional IRA accounts. While the rules and regulations around self-direction can be challenging to understand at first glance, the diversity of investment options permitted makes this unique structure worth a second look. Why are retirees drawn to alternative investments, how can custodians improve client outcomes and how do legislative changes impact the industry?

Asset TV assembled a panel of five experts to outline the advantages of self-directing, and to parse through some of the forces shaping the industry such as the DOL Fiduciary Rule.

Topics discussed during this MASTERCLASS include the resurgence of self-directed IRAs, and commons misconceptions associated with these investment vehicles. From the role of the custodian to the disqualified person’s rule, this edition of MASTERCLASS covered some of the most important elements of this retirement opportunity.

The result is an all-encompassing lesson about the advantages, regulations and pitfalls with selfdirected IRAs. Check out Asset TV’s MASTERCLASS channel for our latest episodes on a range of investment topics. Accredited by the CFP Board, the CFA and IMCA, MASTERCLASS is continuing education at the touch of a button. Simply log on to Asset TV, watch the program, and take a corresponding quiz to earn the credit.

John Kiley - Principal at MidAtlantic IRA “I think the biggest advantage is just diversification.

What most people learn through financial planners is that they need to diversify their portfolio, and they tend to do this individually, but not in their retirement plan. And I think logically if you can do that or diversify individually, they want to do that through their retirement plans.”

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Beverly Edwards - Senior Vice President William Humphrey - Co-Founder and and Counsel at Mainstar Trust CEO at New Direction IRA “There are account holders who want to hold a particular asset — let’s say it’s a precious metal, real estate, an LLC, any sort of offering. But they want to diversify in another way; they want to hold part of it in their self-directed IRA, and also purchase some in a taxable account. There are administrators and custodians in the business who offer both accounts.”

“[A client] walks in, and they have experience with real estate or precious metals, and they want to do that. It’s a big pile of money in their retirement... sometimes it’s the biggest pile. And they want to diversify it into as many things, and particularly things that they understand and they’ve been successful with personally.”

Timothy Kuhman - Vice President, Compliance and General Counsel at The Kingdom Trust Company

Kaaren Hall - Founder and President at uDirect IRA Services

“Some of the pitfalls, especially in the self-directed area, are [that] the account holders and sometimes the RIAs themselves don’t understand that the custodian is not doing any of the due diligence. And it’s really up to you, the account holder or the registered investment advisor, to do that due diligence, or at least to help your account holder do that due diligence.”

“The self-directed IRA landscape, I think has changed so much since 1975 when self-directed IRAs were first announced. I mean when IRAs came out you could self-direct from the beginning. But I really think that self-directed IRAs saw a resurgence in 2009, when the banks weren’t lending anymore. And when banks stopped lending, people were looking for capital and they found self-directed IRAs.”

November 2017 | REVIEW ASSET TV | 27

HOT SEAT

PAYCHECK OR POT OF GOLD?

WITH METLIFE’S RETIREMENT EXPERT: ROBERTA RAFALOFF

retirement for many, many years.

The average 65-year old today is going to live to age 85, 25 percent of those 65-year olds are actually going to live to 95-years old. So, when you’re given the choice of taking your distribution as a lump sum or as an annuity you really need to think about how you’re going to be able to manage those assets if you take them as a lump sum for all of those years in retirement.

JEFF SNYDER SENIOR CONSULTANT OF CAMMACK RETIREMENT

What can policymakers do to help retirees make better decisions?

EXPERT PROFILE As a leading expert in retirement solutions, Roberta Rafaloff understands the complexities that defined contribution plan participants face. The Vice President, Institutional Income Annuities in MetLife’s Retirement & Income Solutions joined Asset TV’s Hot Seat to answer questions from viewers about issues surrounding retirement plans.

What factors should retirees take into consideration when deciding which distribution option is right for them?

RICHARD REED VICE PRESIDENT AND DEFINED CONTRIBUTION PRACTICE DIRECTOR SEGAL GROUP

The decision about whether to take a lump sum or an annuity from either your defined benefit plan or your defined contribution plan is a critical decision and one that really should not be taken lightly. Think about it, you’ve saved in your 401(k) plan for many, many years, and the good news is you’re going to be in

28 | REVIEW ASSET TV | November 2017

Putting income disclosures on the annual statement. So, again, everybody gets an annual statement from their 401(k) plan every single year.

And all we’re asking is that lump sum that they have accumulated and it shows that value, so if for example you’ve saved $200,000 in your 401(k) plan, just equate that to what it means in terms of guaranteed income. So that $200,000 you’ve saved, equates to how much in annual income when you retire.

And again, that’s going to do two things: it’s going to promote additional savings into 401(k) plans, since people realize that they’re going to need more money and it’s going to start to reframe 401(k) plans so that they look more like the old pension plans.

REVIEW ping going through there. It’s already happening now. All of a sudden, with immigration and all of these things, you’ll see new struggles on who controls what and how.”

GEOPOLITICAL INSIGHTS WITH DEUTSCHE BANK’S MAN IN WASHINGTON: FRANK KELLY

DOUGLAS BONEPARTH PRESIDENT OF BONE FIDE WEALTH The global events that are taking place surely impact everyone regardless of age. What are some of the predominantly challenging headwinds that we face?

“There’s the short term issue of North Korea. It’s something that A former White House insider and SEC advisor, Frank Kelly is no stranger to the machinations of Washington. The managing director and global coordinator of public affairs is going to have to be dealt with...I for Deutsche Bank sat down with Asset TV to answer questions from our viewers on the would expect probably in the next subject of geopolitical risk. two to three months. Now, what I of. Russia has negative population watch for from a market perspecTIM BARRON CHIEF INVESTMENT growth with no immigration at all. tive is in October: the Chinese OFFICER OF SEGAL MARCO The World Bank, the IMF, and other Party Congress meeting is takADVISORS folks have done research on this, and ing place. China doesn’t want to What are some of the key geopolit- Russia’s population could be small- get too involved yet until they get ical risk factors in the world today? er than the Philippines by the year through this very important reform 2050. That’s nine time zones…and congress, and then they can be“Migration, immigration, refugees— who replaces that? Russia is mineral gin to focus on North Korea. Also it’s an issue like we’ve never seen rich, it’s got everything in the world first week of November, President before. Seeing how Europe itself has — the Chinese will be looking, and Trump’s tentatively scheduled to go to Beijing. So watch for these to be been transformed, not only just from they’re already moving in there. the two catalysts as we figure out the Middle East, but from Africa itself, people are desperately seeking new Other things which are on the fore- a way to begin negotiating. This opportunities. Second: I would also front: who controls the Arctic and the has, of course, put a tremendous talk about the decreasing popula- Antarctic? This very week there is a amount of uncertainty into the martion—China is the fastest aging pop- conference being held on that, trying ketplace.” ulation in the world. The one child to figure out who gets mineral rights. policy has left them with a shrinking With global warming and easier ways population, and a lot of older people to traverse through the Arctic areas, are going to have to be taken care you’re going to see a lot more ship-

EXPERT PROFILE

November 2017 | REVIEW ASSET TV | 29

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MEET THE TEAM Are you interested in becoming a part of Asset TV’s cutting edge programming? Reach out to a member of our sales team to learn more about opportunities to reach your desired audience.

Neil Jeffery EVP – Head of Americas

Deb Wetherbee SVP – Sales

Having worked with Asset TV in the U.K. since the company’s inception in 2003, in 2012 he crossed The Pond to establish Asset TV Inc. in NY.

Deb is a seasoned member of the industry bringing her expertise from kasina, FRC, Nuveen, and Nvest (now Natixis) to Asset TV Inc. Deb is currently spending most of her free time watching little league games from the sidelines.

Jason Brandt VP – Sales

Lloyd Layton VP – Head of Business Development

neil.jeffery@asset.tv

jason.brandt@asset.tv

deb.wetherbee@asset.tv

lloyd.layton@asset.tv

A graduate from Binghamton University, BA, and Pace University, MBA, Jason was one of the first to join Asset TV Inc. He is also the current office champion of ping pong and bowling.

A self-described FinTexpert, Lloyd can be found sailing the globe, walking his pug and thinking really hard about blockchain.

Scott McKenna Business Development Manager

James Damico Business Development Manager

An ever-prepared Eagle Scout, Scott supports the Asset TV sales team in San Francisco. He holds a Bachelor’s in Economics from SUNY Albany.

Jim is a Business Development Manager and his primary focus is on continuing education. He graduated from Youngstown State University with a BA in Finance. Jim enjoys watching his favorite team, the Ohio State Buckeyes.

scott.mckenna@asset.tv

james.damico@asset.tv

Michael Prisco Business Development Manager

Ben Vogel Business Development Manager

A BA Graduate from Penn State, Mike is proud to be a part of the Asset TV sales team.

He enjoys long walks on the beach, college football, and cold calls.

Ben traveled from London to join the U.S. sales team. As a graduate of UVA and aspiring disruptor, Ben is actively pursuing the American Dream with Asset TV. He is also a devoted 49ers fan.

michael.prisco@asset.tv

ben.vogel@asset.tv

November 2017 | REVIEW ASSET TV | 31

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