Market Insight with Chris Cullen
Senior VP and Head of ETFs for Brompton Funds speaks about today’s market
Chris Cullen is the Vice President and Head of ETFs at Brompton Funds. Brompton had the number one preferred share fund in 2019. Their funds are also all actively managed with high monthly distributions. BTV’s Taylor Thoen spoke to Chris about investing in today’s market.
Have We Reached the Bottom?
Chris Cullen believes that there isn’t a lot of value in trying to predict whether we’re at the bottom or whether the market’s going to drop again. “The markets right now, Large-Cap Equity Markets in North America, since January and into February and March have dropped about 30 to 35 percent. And since late March, they’ve come back about halfway to where they were between late March and then in January. You know, things could go up or down from here.” Cullen’s advice to investors is to keep invested, to keep some liquidity handy, if possible and to buy opportunistically if the market drops. “But please don’t sell at this point.” he says.
Chris says that there have been some shifts in the ETF space. One of them would be the move from passive to active funds. Another trend has been a move away to some extent from factor investing. “Computer algorithms would screen a list of stocks and pick out the names that best reflect those factors. They’ve been very successful, but we’re starting now to see investors shift away from factor investing and more into sector investing.”
Are ETF’s Safer in This Time?
According to Cullen, you can get great returns. Also, diversification can help eliminate the hit that you take when you make a wrong move and you buy a single needs. If you’re a fund investor and you’ve bought mutual funds for a number of years, what you find is you’re putting an order for a dollar amount and you’ll get the end of the day net asset values. “When you’re buying ETFs, you see immediately what price you’re going to get. You can decide what to bid on an ETF.”
Advice for Investors
Cullen’s advice is that if you do have liquidity available to put to work in the markets right now, the returns will be great in the future. Chris likes to take the amount that he’s going to buy and divide it up into approximately five pieces and buy over a little bit every day over a week. “It’s really a lot about just overcoming your emotions. Being rational, making a calm plan and executing it and not giving in to that urge to just push all your money and all your chips into the middle of the table at any one time.” says Cullen.