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American Century Launches New Fund And New Alternatives Brand

By DailyAlts Staff Although American Century launched its initial alternative mutual fund more than a decade ago, the firm is best known for its traditional strategies involving stocks, bonds, and cash. But American Century has been making more of a push into liquid alts, with the hiring of Cleo Chang as Head of Alternative Investments, and the recent launch of the AC Alternatives Income Fund (MUTF: ALNNX ). The new fund is the first of several to be launched as part of American Century’s new AC Alternatives brand, and the firm’s other alternative products have been re-branded as part of the AC Alternatives line, as well. AC Alternatives Income The newly launched AC Alternatives Income Fund is managed by Perella Weinberg Partners Capital Management, a leading global institutional asset manager with over $9 billion in assets under management. The firm’s sub-advisory team is headed by Chris Bittman, chief investment officer of Perella Weinberg’s outsourced CIO service unit Agility, and rounded out by his Agility colleagues Kent Muckel and Darren Myers. “We’re excited to be collaborating with Perella Weinberg to bring our clients a range of alternative investment solutions,” said Ms. Chang, in a recent statement. “Perella Weinberg’s experience managing both traditional and non-traditional asset classes serves as a nice complement to American Century’s own expertise as a multi-boutique, risk-aware, institutional-quality asset manager.” “For the new AC Alternatives Income Fund, we’ve assembled a team of portfolio managers and subadvisors with deep experience investing across a range of asset classes under varying market conditions,” said Mr. Bittman. “Like American Century, our asset management business is predicated upon the principle that, over time, a client’s success ultimately translates into the success of the firm.” Mr. Bittman and the rest of the Perella Weinberg sub-advisory team seek to provide the fund’s shareholders with “diverse sources of income” by using a “flexible and opportunistic investment strategy” that allocates assets among various underlying subadvisors, each pursuing different investment strategies. Currently, the fund’s sub-sub-advisors include Arrowpoint Asset Management, Sankaty Advisors, Third Avenue Management, and Good Hill Partners. American Century Investments provides additional oversight. ACAlternatives.com In addition to the re-branding of American Century’s two previously existing alternative funds with the AC Alternatives moniker – the AC Alternatives Equity Market Neutral Fund (MUTF: ALHIX ) and the AC Alternatives Market Neutral Value Fund (MUTF: ACVVX ) – American Century has also launched ACAlternatives.com as an alts-education website. A section at the site titled ” What are Alternatives? ” lists 6 reasons to own alts, the evolution of alts, types of liquid alts, and liquid alts versus private structures; another section on ” Using Liquid Alternatives ” provides links to pages on allocating, special goals, and risks. ACAlternatives.com is optimized for tablet users and also features insights from investment professionals, videos, and “other tools designed to help investors make informed decisions when considering alternative investments.” AC’s Other Alts The fund now known as the AC Alternatives Equity Market Neutral Fund was originally launched back in 2005. For the three years ending July 31, the fund’s 2.23% returns ranked in the top one-third of funds in its category, earning it a four-star rating from Morningstar. American Century’s Market Neutral Value Fund was launched in 2011. Its three-year returns of 3.00% through July 31 ranked in the top 22% of funds in its category, earning a matching four-star rating. The AC Alternatives Income Fund, which launched on July 31, is just the first of three Perella Weinberg-advised funds American Century plans to launch this year. The others will include the AC Alternatives Equity and AC Alternatives Multi-Strategy funds. The former will combine several equity-oriented strategies in pursuit of attractive returns with low correlation to the stock market; while the latter will employ several sub-strategies, including long-only equity, long/short equity, and event-driven, in pursuit of the attractive returns with low correlation to the stock and bond markets.

UWTI: Forget About Growth

Originally published on August 6, 2015 VelocityShares 3X Long Crude ETN (NYSEARCA: UWTI ) is set to close down strongly on Thursday morning as oil traders worry that the market is far from a takeoff. An Oppenheimer report on the market suggested that the cut in supplies by producers won’t be enough to save them from the glut in the market, and much pain ahead. Fadel Gheit, who wrote the report for the research house, said that recent reports from the oil firms were a sign of shifting market outlook. “The priority now is to discontinue budget spending. The priority is to live within your means. Forget about growth. They are now in survival mode.” Oil pumpers slash budgets Mr. Gheit was commenting the recent changes to outlook seen in the earnings report of some of the biggest oil firms in the world. Chesapeake has cancelled its payouts to shareholders , Exxon Mobil (NYSE: XOM ) has slashed its capital spending and Royal Dutch Shell (NYSE: RDS.A ) (NYSE: RDS.B ) has cut more than 6,000 jobs . At the root of the trouble is OPEC . The global oil cartel has decided to keep its supply high despite the price of Brent falling below $50. Shell CEO told investors that his firm is “planning for a prolonged downturn.” Those betting on the VelocityShares 3X Long Crude ETN may want to do the same. Mr. Gheit said that major oil firms were “still not willing to abandon their rosy forecasts,” but, “at least they are addressing the near-term situation that we have to do something now and not wait for oil prices to recover.” Supply of oil is set to fall over the coming years because of lower investment from firms across the world, but it’s still not going to be enough to allow oil makers, or the price of the black liquid, to grow by a huge margin. VelocityShares 3X Long Crude ETN gets crushed After open this morning the VelocityShares 3X Long Crude ETN was trading for $1.28, down 4.1 percent for the day so far. Those who have been trading the ETF in the hope of a surprise oil spike have been hit hard in recent weeks as Iran’s coming entry into the global market keeps pushing prices lower. In the last month the ETN has lost more than 40 percent of its value. It has lost more than 70 percent since the year began. Rumors that VelocityShares 3X Long Crude ETN will be forced into a reverse split have not yet been met with any facts to back them up, but if prices keep crashing there may be no other option. Leveraged ETFs are not for the faint of heart and 3X oil, much like its gold cousins, has been a very difficult market to make money in in 2015. That trend may continue through the second half of the year and those that don’t know what they’re doing should reduce their exposure and stop trying to time a market that’s controlled by a cartel thousands of miles away. Original Post

Invest Like Henry Kissinger

By Carlton Delfeld “I’ve always acted alone. Americans like that immensely.” – Henry Kissinger Have you seen Henry Kissinger lately? At 92, he’s as fluent as ever on foreign affairs. It makes you wonder whether, even at this advanced stage of life, he could do a better job managing American foreign policy than our current leaders. This brings me to Ukraine, Russia, and China. They look like a beautiful mess right now – but within a reasonable period, American foreign policy will gravitate back to a Kissinger dictum: America can only afford one big power adversary at a time. At this time, the one adversary is clearly China. In short, the whole Ukraine-Crimea-Russia fiasco could’ve and should’ve been avoided. Unfortunately, Ukraine is a prisoner of geography and history. It’s a bridge between East and West – a classic buffer state. The country will always need to balance closer ties to Europe with good relations with Russia, and this practical consideration should be reflected in American diplomacy. Pushing Russia closer to China is certainly not in American interests. Lord Palmerston once said, “Nations have no permanent friends or allies – they only have permanent interests.” Thus, the probability is on the side of U.S.-Russia relations improving in the long run. The stakes are simply too large and the logic of some sort of rapprochement too clear and convincing. In fact, while headlines have created a perception of a crisis in U.S.-Russia relations, the reality is that diplomats on both sides are working hard on “alliance management.” As an emerging bond trader active in Russia put it to me, “A lot of this is elaborate political theatre.” I believe that the gap between perception and reality is where fortunes are made, and Russia is the perfect example. Despite the country’s reputation as being a non-competitive, monopolistic economy, there were over 21,300 foreign capital enterprises operating in Russia by the end of the second quarter. And American companies invested $1.18 billion in Russia in 2014, nearly double the $667.2 million recorded in 2013. What’s more, Russia’s stock market is trading at astoundingly cheap valuation multiples right now. We know the reasons: economic sanctions imposed by Western democracies, falling energy prices, and, finally, the falling ruble, which is down sharply against the dollar this year. The stocks in the Market Vectors Russia ETF (NYSEARCA: RSX ) are trading at an 80% discount to the S&P 500 Index and at less than 65% of break-up value. Howard Marks of Oaktree Capital puts price and value at the center of his book, The Most Important Thing: For a value investor, price has to be the starting point. It has been demonstrated time and time again that no asset is so good that it can’t become a bad investment if bought at too high a price. And there are few assets so bad that they can’t be a good investment when bought cheap enough. Plus, we don’t need a miracle to profit from the situation, either. An American hedge fund trader active in Russian markets put it to me this way: “Things don’t have to turn around in Russia for me to make money. They just have to get a little bit better.” This is the key. If energy prices stabilize or rise, if the situation in Ukraine improves, if the ruble bounces back – any one of these catalysts could spark a sharp rally. RSX is down 32% over the past year and has pulled back 16% from its recent peak in mid-May. So it’s a good time to get ready to pull the trigger on one of the largest oil and gas companies in the world, Lukoil ( OTCPK:LUKOY ). Lukoil exceeds even Exxon Mobil (NYSE: XOM ) in total proven oil reserves. Even more impressive, the company has remained free cash flow positive during the entire past decade. The company also has a very low risk of government intervention, with a professional board and management at the helm. Despite this, Lukoil is trading at 37% of break-up value and 4.4 times trailing earnings. Right now, I’d nibble on a position and take a more sizable stake when a clear uptrend develops in the stock. Like Kissinger, don’t fear acting alone. Investing in undervalued – even hated – stocks when they turn is the most consistent way to build substantial wealth. Original Post Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.