Learning Center

Structured finance is a large component of the U.S. fixed-income bond market and, yet, generally underweighted in many traditional fixed-income bond portfolios, in our opinion. The breadth of investment alternatives is quite large owing to the diversity of underlying collateral types and investment structures within.

The GLA Large Cap Value strategy seeks to provide total return in excess of the Russell 1000 Value Index over a full market cycle.

As an investment advisor, you understand the importance of adapting portfolio strategies to align with the ever-changing market environment. Mid-year 2024 presents a unique opportunity to reassess and potentially reallocate client portfolios. The current market dynamics strongly suggest that a shift from growth to large-cap value stocks is not only imminent but also advantageous.

As an investment advisor, assessing the strength and resiliency of various asset classes like large-cap value is crucial. The dynamics of this asset class have shifted, driven by technological advancements, changing economic conditions, and new secular themes. Recognizing these changes and their implications can help you make informed decisions to optimize your clients' portfolios.

After 30 years in our current office space, we are preparing to move to a new historic building in Omaha that happens to be world headquarters for Berkshire Hathaway. For some, this has been light duty, but for one with 50+ years of accumulated files, it has been a much heavier lift.

“What’s past is prologue” – Shakespeare, The Tempest

Prudent risk management demands that we try to be aware of as many possible risks that exist in our companies, the market, and subsequently in our client portfolios. 

In May 2024, Bristol Gate celebrated its 15-year anniversary of our US Equity Strategy. As we did when we reached our ten-year anniversary, we thought it would be worth revisiting what has allowed us to succeed over that time, and why we believe this approach will continue to offer opportunities for many years to come.

At Bristol Gate, we focus on investing in high-quality companies that demonstrate strong potential for high dividend growth. We utilize advanced machine learning algorithms alongside the assessment from our portfolio managers to help determine a company’s dividend growth and quality characteristics.

A key challenge of investing in large-cap value stocks is that all investors have extensive access to large-capitalization company information and the thinking and strategies of their corporate management teams. There are plentiful analyst research reports, easy-to-retrieve company fundamental metrics, leadership interviews, stock tracking tools, and so on. 

The Major Trend Index held at a Neutral reading for the week ended July 26th. A second consecutive weekly decline in the S&P 500 failed to knock down our Technical composite from its bullish perch at +4.

Leuthold Select Industries is the mutual fund incarnation of our Group Selection Scores (GSS), the primary equity discipline at our firm. The GSS process employs a multi-factor approach to identify themes and groups scoring highly on characteristics that typically lead to future outperformance.

The latest CPI report was a tad cooler than consensus. Our scorecard suggests the modest disinflationary regime is likely to persist.

In the old classic 60/40 model, stocks make up the majority of the allocation. Through the end of August, that part of the balanced model has performed brilliantly, up an astounding almost 20% YTD (S&P 500 19.53%). But the risks embedded in that allocation are growing dramatically.

Here at the halfway point of 2024, the light of investment heaven shines brightly from the mountain top, even as the heat of summer drips sweat off the brow of those of us laboring to get our portfolio rocks to the top.

U.S. Treasury interest rates continued to climb in the second quarter of 2024, although more modestly than they did in the first quarter. Large rate increases across the yield curve in April were mostly reversed in May and June, leaving overall base rates 10 to 20 basis points higher at quarter end. The chart below provides a view of rates across the yield curve.

As an investment advisor, you understand the importance of partnering with trustworthy, experienced investment management firms. Your clients depend on your expertise to make informed decisions, and the choices you make for their portfolios can have long-term implications. That’s where Great Lakes Advisors (GLA) comes in—a large-cap value investment firm with a proven track record, deep industry expertise, and a commitment to putting clients first.

As an experienced investment advisor, you’re well aware that the market operates in cycles, particularly between significant asset classes like large-cap growth and value stocks. Understanding these cycles allows you to make informed decisions on behalf of your clients, adjusting allocations to align with prevailing economic conditions.

Navigating the fixed income market is becoming increasingly complex due to a range of unpredictable factors. With upcoming presidential elections and interest rate cuts [finally] a reality, the fixed income markets face significant challenges in the months ahead.

The Major Trend Index was unchanged at a High Neutral reading of +1 for the week ended November 1st. The Sentiment factors moved up a notch to -3, while numerous downgrades within the Technical work were not quite enough to knock that category’s reading down from a solidly bullish tally of +4.

October is often a tough month for risk assets. Some of the stock market’s biggest sell offs in history have occurred in this first full month of fall in the northern hemisphere. Credit instruments often trade in sympathy with equities, if not in lock step occasionally. 

The S&P 500’s estimated bottom-up operating EPS shrank 2% during the first month of Q3 reporting (Chart 1). A similar, slighter larger drop in the EPS estimate was experienced in July, as results were tallied for Q2’s first month of reporting. That initial Q2 deficit was recouped over the next two months and actual results eventually ended higher than what was projected at the beginning of earnings season. 

The Major Trend Index was unchanged at a High Neutral reading of +1 in the week ended November 22nd, and its four factor categories held steady at their recent levels. After a minor reduction in our tactical portfolios’ equity hedge in early November, those accounts are positioned with net equity exposure of 58%. 

Another year in the proverbial books. Looking back on 2024, there have been quite a few surprises.  The U.S. economy remained resilient despite the "experts" calling for an imminent recession. Stock indexes registered new highs as AI (artificial intelligence) fever seemed to promise endless prosperity.

Happy New Year! As we reflect on 2024, we entered the year with modest expectations amid a complex and uncertain environment. The stock market, however, demonstrated resilience, delivering strong results. Artificial Intelligence (AI) was a key focus for investors and stock index returns were skewed by outsized returns on a handful of megacap tech stocks.

It is possible that value investing is genuinely dead, as a few have surmised. To our knowledge the coroner has not yet issued a final report, but the evidence is mounting. In the collection of evidence, we continue to note the valuation chasm between cheap and expensive companies in U.S. equity markets. This phenomenon is not unprecedented, but the current iteration grew gapingly large and seems unusually persistent.

Once a part of the structural foundation of equity markets, the community of value-oriented boutiques has been significantly impacted by these distortive phenomena. It is indeed a business strategy offering little insulation from these challenges. A number of firms have closed, while some others have adjusted their strategies to be more in keeping with the present investing zeitgeist. 

The Major Trend Index was unchanged at a Neutral reading of zero in the week ended January 31st. The leading Technology stocks have so far managed to shrug off the sudden emergence of an ultra low-cost competitor to existing AI models. In fact, our weekly Chart Scores for both the NASDAQ Composite and NYSE FANG+ Indexes remain at maximum bullish levels. 

Question: “What do the stock market and my wife have in common?”
Answer: “They’re both always right!”

The market optimism that defined the past two years could be starting to fade, with investors growing increasingly wary of elevated stock valuations and macroeconomic and policy uncertainty. Bearish sentiment among individual investors reached its highest level since 2023, fueled by concerns over trade policy shifts, persistent inflation, and dwindling expectations for interest-rate cuts1.

Closed-end funds (CEFs) remain an attractive investment vehicle for sophisticated investors seeking income, diversification, and market inefficiencies that can be exploited for additional returns. 

As we have discussed previously, closed-end funds (CEFs) offer a compelling investment opportunity for investors seeking income, diversification, and exposure to alternative asset classes.

Market inefficiencies within closed-end funds (CEFs) create compelling opportunities for sophisticated investors seeking to capitalize on pricing discrepancies and generate alpha.

While market inefficiencies in closed-end funds (CEFs) create opportunities, accessing and optimizing these opportunities requires skill, research, and active management.

With spreads hovering near historic lows, investors face tough choices. Which sectors still offer value—and which ones pose more risk than reward? Check out the full article to learn more about navigating today's challenging fixed income landscape.

Risk assets entered 2025 on a high note, propelled by the new administration's pro-growth policy agenda. From extending (and potentially expanding) the 2017 tax cuts to mass deregulation and the promise of a smaller, more efficient government, investors and business leaders sensed a return of “animal spirits” to the U.S. economy. 

A Window for High-Yields: Fast-Moving Advisors Could Gain an Edge. For financial advisors and income-focused investors, the search for high-yield, low-volatility opportunities is critical.

Did you know that residential credit investments can generate yields approaching 10% — nearly double what’s available in traditional fixed income? Yet, many financial advisors are still overlooking this high-income sector.

Tariffs, market volatility, interestrate uncertainty and worries of a potential recession: In this marked “risk off” investment environment, financial advisers and their clients are seeking investments that may offer strong returns with potentially lower risk.

Shifting Supply/Demand Dynamics – The growing U.S. population combined with continued migration patterns, with continued movement to the Sunbelt region and net migration losses from other regions (the Northeast, Midwest, and West) – are creating regional opportunities.

At Great Lakes Advisors, we believe the true measure of an investment strategy is its ability to deliver consistent outcomes over time, regardless of market headlines or investor sentiment.

Within President McKinley: Architect of the American Century, renowned author Robert W. Merry covers the rise of President William McKinley—including his early stance as a stern “protectionist” and association with tariffs implemented in the 1890’s.

When an asset manager allocates capital to Commercial Mortgage-Backed Securities (CMBS) or Commercial Real Estate Collateralized Loan Obligations (CRE CLOs), it’s helpful to understand why those decisions are made and how they influence overall portfolio construction.

The Trump administration has signaled an ambitious push to reform housing finance by shrinking the footprint of  government-sponsored enterprises (GSEs) while maintaining affordable mortgage rates.

I recently joined Sam Vadas on Schwab Network’s Trading 360 to discuss earnings, AI, and market dynamics. One theme came through loud and clear: today’s markets are reacting more to positioning and sentiment than to fundamentals.

Tax Efficiency Isn’t Optional Anymore. Discover how active tax management can help maximize after-tax returns for your clients.

Traditional diversification is under pressure. Discover why income, stability, and uncorrelated returns are now essential—and how residential credit can help meet the challenge.

Great Lakes Advisors explains that tax drag can erode up to 2% of returns annually, making tax-managed investing essential not only for ultra-wealthy clients but also for mass affluent investors, retirees, and those with concentrated holdings. By using customizable, year-round strategies such as proactive harvesting, ESG overlays, and legacy position management, advisors can deliver stronger after-tax outcomes and differentiate their value.

Great Lakes Advisors emphasizes a systematic, year-round approach to tax management that goes beyond one-off tax-loss harvesting by integrating tax considerations directly into portfolio construction and monitoring. This proactive strategy helps advisors optimize client outcomes through smarter harvesting, customized transition management, and clear communication of tangible tax savings.

For decades, core equity investing has been defined by a binary choice: embrace passive indexing or pursue active management. Both approaches have compelling advantages. Passive strategies deliver low costs, transparency, and benchmark consistency.

Capturing volatility effects seeks to improve diversification and deliver alpha (the excess return of a portfolio relative to its benchmark, typically on a risk-adjusted basis) without excessive tracking error or style drift. 

The U.S. equity market is in rare territory. If you own a diversified portfolio, there’s a good chance that a growing share of your wealth is tied to the performance of just a handful of mega-cap stocks — the companies that dominate the S&P 500. The problem? These businesses may be excellent, but history shows that paying any price for quality can be dangerous. 

Passive investing has had a remarkable run over the past decade. Flows into index funds and ETFs have been relentless, reinforcing the dominance of U.S. large-cap growth stocks. This trend has created what some have described as a “bear market in diversification” — a period when almost every attempt to invest differently from the benchmark has been punished. 

But 2025 has shown the first real signs that this dynamic may be shifting. During the first half of the year, U.S. large-cap stocks underperformed international equities, and the U.S. dollar saw its sharpest first-half depreciation in nearly 50 years. For investors who have been waiting for a reason to diversify, this could mark the beginning of a new market regime

Income generation remains a central and increasingly complex challenge for advisors today. Traditional fixed income vehicles, once relied upon for stability and yield, have faced structural pressures from prolonged interest rate volatility, inflationary erosion, and inconsistent total returns. Meanwhile, risk-adjusted opportunities across public and private markets have become more difficult to source without accepting additional complexity, liquidity constraints, or heightened downside exposure. 

In the search for consistent, risk-adjusted income, many investors are reexamining the foundational elements of their fixed income allocations. Traditional fixed income allocations no longer provide the same balance of yield and stability that once defined the core bond market.

The Major Trend Index was unchanged at a high neutral reading of +1 in the week ended October 10th. 

In the last week and a half, the stock market has largely shrugged off a mini-crypto crash and several signs of corporate credit cracks. Impressive, to say the least. 

The Major Trend Index was unchanged at a High Neutral reading of +1 in the week ended October 24th. This stance has been same since the beginning of July. Net equity exposure across Leuthold’s tactical asset allocation strategies stands at 55-56%. 

The Major Trend Index was unchanged at a high neutral reading of +1 in the week ended October 31st. 

Sector rotation is a well-respected technique for building equity portfolios. Leuthold believes there are advantages of operating at the group level, rather than the traditional sector level, to enable clearer alignment with the business cycle, stronger factor signal extraction, and wider performance dispersion across industries.

The search for durable income has grown more complex as traditional fixed income faces renewed pressure. In today’s market environment, delivering income is no longer a matter of simply selecting yield-generating securities. It increasingly involves identifying sources of income that align with clients’ broader portfolio objectives; balancing risk, liquidity, tax implications, and return consistency.

The Major Trend Index was unchanged at a High Neutral reading of +1 for the week ended November 7th; in fact, the status has not changed since the beginning of July. Net equity exposure across Leuthold tactical asset allocation strategies stands at a moderate 55%.

After several years of underperformance relative to large caps, small and mid-cap equities may be approaching an inflection point. As monetary policy, valuations, and capital investment trends evolve, investors are reconsidering where future growth and value may emerge.

The Major Trend Index continues to offer a lukewarm affirmation of the bull market, remaining at a High Neutral reading of +1 for the week ended November 14th. That’s enough of an endorsement for us to keep tactical asset allocation portfolios positioned with moderate net equity exposure of 55%. 

Our innovation thought leadership interviews regularly explore the ongoing evolution happening in investment and risk management, but we also take deep dives into “niche” investment areas or specific strategies to learn from experienced managers with unique perspectives. We feel it is critical, in such a rapidly changing industry environment, to continuously re-examine and learn from different investment approaches and ways of thinking.

The summer lull in European financial markets didn’t extend to distressed investing this year, and August 
saw a flurry of activity. In particular it was the loan space which saw the uptick in activity which is typically 
quieter than the bond market due to the private nature of the loans market. There was a sharp increase in 
the number of loans classified as stressed or distressed from 75 loans from 43 companies at the end of July 
to 97 loans from 49 companies at the end of August.

The Major Trend Index flipped back to High Neutral for the week ended November 
28th. A lot of the chart and momentum-score damage from two weeks ago has been 
spackled over with the market’s admirable bounce into month-end, warranting the 
Technical upgrade.

The Major Trend Index stayed at High Neutral for the relatively quiet week 
ended December 5th. Net equity exposure in Leuthold tactical strategies currently stands at a moderate 55%. 

The Major Trend Index continued on at a High Neutral stance for the week ended December 12th. Net equity exposure in Leuthold tactical strategies stands at a moderate 
55%. Last week, I spent a few spare minutes locating and inventorying long lost silver 
coins at my house. I’m guessing I’m not the only one with a renewed interest in sock 
drawers and old shoe boxes.

The Major Trend Index ended the week of January 2nd at High Neutral. We’re 
now six weeks removed from the breakdown in our Technical work that triggered some indigestion—and a brief downgrade to Neutral—just before Thanksgiving. Leuthold tactical allocation strategies start the new year with 
net equity exposure of 56%.

For most of this century, advisors have relied on a barbell portfolio approach to core equity: index funds on one side for low-cost beta, high-conviction active managers on the other for differentiated alpha.

But today’s markets look different. Indexes have grown more concentrated, behaving less like broad market exposure and more like momentum trades in a handful of mega-caps. Meanwhile, many active managers continue to struggle with the risk of style reversals and extended drawdowns, leaving advisors with fewer reliable tools at the center of their portfolios.

Markets are full of stories. One year it’s the promise of tech dominance, the next it’s the resurgence of value, or the latest conviction stock touted as the next big winner. These narratives may capture attention, but they rarely endure. For advisors, leaning on stock stories or style cycles often means building portfolios on shifting ground.

For many advisors, the middle ground between passive indexing and high-conviction active has been factor investing. Tilt toward value, quality, or profitability, and the story goes, clients get systematic exposure to traits that have historically driven outperformance.  

Most investors assume portfolio growth is simply the weighted sum of the returns of the stocks inside it. If the companies in the portfolio do well, the portfolio grows in line.  

But that view is incomplete. According to Stochastic Portfolio Theory, portfolio growth comes from two independent sources: stock effects and volatility effects. One reflects the companies you own. The other reflects how those companies move together.  

The first full week of 2026 featured another upgrade to our Cyclical work—the second in 
the last month. This bump was not enough to move the overall Major Trend Index out of 
High Neutral, however. Net equity exposure in Leuthold tactical accounts continues to rise 
with the market and now stands at 57%.

The Major Trend Index stayed at High Neutral for the week ending January 16th. The constant drum of new highs and a broadening market has pushed our technical work to the brink of another upgrade. Inside the scope of the MTI, the new year is off to a terrific start. However, if we tracked Cyclical components called “Threats to Central Bank Independence” or “Status of Intergovernmental Military Alliances,” both would be decidedly negative after the first few weeks of 2026. Net equity exposure in Leuthold tactical accounts continues to rise with the market and now stands at 57-58%.