In a mid-term report card that reviews "Top 10 Investment Themes for 2010," Bob Froehlich, senior managing director of The Hartford Mutual Funds, gave himself one A grade, four Bs, one C, no Ds, and four Fs for a variety of investing strategies in the first volatile half of 2010.
The online report, which describes a challenging market still in the early stages of economic recovery, also identifies ways mutual fund investors may diversify their portfolio to stay in line with long-term financial goals and potentially smooth some of the short-term market volatility.
"This was one painful mid-term report card; I'm putting myself on investment probation," wrote Froehlich, known to many as "Dr. Bob" but who also is in fact a recently retired vice chairman of Deutsche Asset Management with 30 years of Wall Street and Main Street experience that he brought to The Hartford when he joined the Simsbury, Connecticut-based company in 2009.
"I've never been happier to close out the first six months of a year," Froehlich added. "That being said, I'm looking forward to the next six months, when corporate America rebuilds its inventory, which was at its lowest levels since July 1949 when the year began. I also look forward to corporate America spending some of the more-than-$500 billion in undistributed profits, which is the highest level since 1950."
Froehlich's A grade was for his "Up, Up, and Away" investment theme, with a strategy of investing in asset classes that will perform well in a rising inflationary environment.
"One of the specific suggestions for this theme/strategy was to invest in Treasury Inflation Protected Securities (TIPS)," Froehlich wrote. "For the first six months, both Barclays U.S. Government Treasury TIPS (1-10 years maturity) and Barclays U.S. Government Treasury TIPS (maturities of 10 years and longer) posted positive returns, and clearly outperformed the overall market, as measured by S&P 500 Index ETF (down 6.55% for the first six months). Barclays U.S. Government Treasury TIPS (1-10 years maturity) was up 3.2%, and Barclays U.S. Government Treasury TIPS (maturities of 10 years and longer) was up 7.1%.
Froehlich's four Fs came from 10 investment strategies made earlier this year that included: 1) overweighting the Technology sector; 2) overweighting large-cap stocks versus small-cap and mid-cap stocks; 3) overweighting the Energy sector; and 4) overweighting the Health-Care sector with a global perspective.
Read a story about The Hartford's launch of three Wellington-managed global funds from the archives of InvestmentAdvisor.com.