knowledge for the sophisticated advisor

Ironically , the 2020 pandemic may have accelerated RIAs ’ business and broadened d their potential pool of talent and clients .

ABC Company Financial Advisor magazine July / August 2021

July / August 2021 • www . fa-mag . com

Cybersecurity Threats To Family Offices Surge

Sophisticated hackers target the ultra-rich .

Investors Look Abroad

For Value

Could the next decade see better returns offshore ?

Real Estate Shakes Off Covid-19

2020 was a double-edged sword for real estate .

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A market upswing helped save this industry in 2020 and recruiting kept its pace .

knowledge for the sophisticated advisor

Chloé A . Moore , Founder and Principal of Financial Staples in Atlanta .

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Tech Stack Headaches So much new software . How do you get it to play with legacy systems ?

After The Corona-Crash Have we learned our lessons about investing in a crisis yet ?

Hybrid LTC To The Rescue ? As long-term-care insurance struggles , hybrid products add flexibility .

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Advisor magazine May 2021

May 2021 • www . fa-mag . com

College Savings Pros And Cons

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How One Advisor Helped ESG Bloom In Texas

Issues like climate change have come to the Lone Star State .

The Value Resurgence : Persistent Or Transitory ? Inflation and interest rates will reveal the outcome .

PORTFOLIO SPOTLIGHT

volatility and the markets going haywire , winning by not losing can be valuable ,” Weiss offers . “ I ’ m pleased that the fund didn ’ t materially underperform the index in a very difficult year .”

Of course , el stinko financial markets like last year ’ s present opportunities to reposition an investment portfolio . Weiss says that in the second half he gravitated toward buying more pro-cyclical names and selling more defensive names because that ’ s where the relative valuations were sending him . ing Covid the stock went down , which provided a valuation opportunity .”

The U . S . Can Be Foreign , Too

The Fidelity Advisor International Growth Fund ’ s portfolio has a healthy dose of U . S . -based firms . In fact , the U . S . held the largest country weighting in the fund as of year-end 2022 at 19.75 %– even though the fund ’ s benchmark had no U . S . exposure at all . ( European companies represent 53 % of the Fidelity portfolio and Japan 12 %.)

Ultimately , Weiss posits , the key to his success has been the consistency of his investment process and portfolio construction throughout the 15 years he has run this fund .

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“ Defensive stocks did very well — and cyclical , industrials and tech stocks did poorly . So the fund began to tilt [ in response to that ], which was more bottom-up than top-down ,” he says .

Recently , Weiss has been watching companies emerge from the Covid disruption to see which ones are notably stronger than they were before . Some companies dramatically cut their cost structures in a way they likely couldn ’ t have done without the massive operational disruption of the pandemic . Those insights have since shaped the portfolio ’ s composition .

Take Safran , a French outfit that ’ s one of the leading makers of engines for narrow-body aircraft . Weiss notes that it can be difficult for companies in certain European countries ( like France ) to cut their cost structures . But Safran took advantage of the aerospace industry ’ s massive downturn during the pandemic to significantly slash its head count .

“ Its cost structure coming out of Covid was very different than it was pre-Covid , yet the long-term demand profile for narrow-body aircraft remains intact ,” Weiss says . “ This is a business model with highly recurring revenue and historically strong pricing power . Dur-

Weiss points out that all U . S . -based companies in his fund have significant overseas operations . One example is PriceSmart , which he describes as the Costco of Central America , the Caribbean and Colombia . PriceSmart is based in San Diego , where the company ’ s founder , the late Sol Price , is credited with developing the warehouse club model . One of his original creations , Price Club , later merged into Costco , which was led by one of his protégés .

“ Its headquarters are in San Diego because that ’ s where the founding family lives , but essentially all of its business occurs in emerging markets ,” Weiss says . “ So yes , these companies show up as U . S . securities , but they don ’ t necessarily trade like U . S . securities because the majority of revenue and profits occur overseas .”

Ultimately , Weiss posits , the key to his success has been the consistency of his investment process and portfolio construction throughout the 15 years he has run this fund .

“ And I want to be patient , which is an important factor in the fund ’ s low turnover ,” he says . “ I ’ m a patient investor because I think that ’ s where the inefficiency lies and that ’ s where I ’ ve been able to find the best opportunities .”

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