Ryan Caldwell on CNBC - How to Invest Now

Aired: Friday, November 20, 2009 8:54 AM ET

Hank Herrmann
Ryan Caldwell, co-portfolio manager of Ivy Asset Strategy Fund, appeared live on CNBC to discuss how the Fund has remained competitive across an unusual market environment, his outlook for global growth, and his current holdings. He touches on reasons for holding gold, the Fund’s recent strong move toward equities and some securities he currently favors.

View Caldwell’s Interview

Transcript


Interviewer:   Turning our focus to 5-Star Investing. The IVY Asset Strategy Fund invests in any assets around the world and when needed uses hedging techniques. Ryan Caldwell’s, Portfolio Manager, of this $19 billion fund and $24.5 billion in total assets under management. Ryan, welcome to you. You’ve got 15% in gold.
Caldwell:   Yes
Interviewer:   How are you investing in gold; in the metal itself or in the miners?
Caldwell:   Um, this product has the, the ability to hold physical bullions. So at the current time, we do actually hold physical bullion in the product. So 15% of it is in 100-ounce and 400-ounce bars.
Interviewer:   Oh, really?
Caldwell:   Yes
Interviewer:   So you want to play....
Interviewer:   Um, you know, could you have....
Interviewer:   ...… pure play the leverage?
Interviewer:   ...brought one because I, I...
Caldwell:   I... they won’t let me take them out of the vault in Scotia or I’d take them with me everywhere I go.
Interviewer:   And I would go a lot of places [laughs] with that gold. All right. Why do you want physical gold?
Caldwell:   Well, it, it... our premise in investing in gold is that we are looking at it as about the only currency in the world we are comfortable with given that this product can be really denominated in any currency we want it to be. We’re not really bullish on any currency anywhere in the world except for gold given what central banks are doing around the world, not just the fed but other central banks. And so we wanted to be as close to the physical asset as we could and, and we had some issues with the mining stocks back when we started investing in gold 7-8-9 years ago where the input costs were rising faster than actually the physical cost of bullion. And so we wanted to be as close to the commodity as we could get.
Interviewer:   How are you hedging yourself, if at all, when it comes to your gold position?
Caldwell:   We can use gold futures in this product.
Interviewer:   Okay.
Caldwell:   The hedge gold... um, when we see the product... when we see gold getting, you know, either ahead of itself, um, or as a way to reduce just gold exposure from a currency prospective, we can use futures.
Interviewer:   And the bars I take it are, uh, are... involve less of the premium than coins?
Caldwell:   Yes, and we do actually do get some leverage through physical storage cost because of the size in which we own, own gold bullions. So for us it’s a much better, um... and for the shareholders it’ a more effective way to actually get a gold... um, in some instances, even more so than the EFT.
Interviewer:   Okay. Let’s move on to the equity picks. Right? We are spending a lot of time on gold. Eighty percent of his portfolio is...
Interviewer:   Oh, the gold story... but you’re right.
Interviewer:   It’s fascinating but I mean...
Interviewer:   So fascinating.
Interviewer:   ...80% of the guy’s portfolio is in equities. [Laughs] Ryan, where are you finding the best opportunities right now?
Caldwell:   You know, our, our portfolio right at this point is really tilted toward global growth. We’ve had this bigger evaluation and everything that’s cheap across the globe given that the world really didn’t end. Credit spreads have really collapsed and so the marginal companies that we all thought were going out of business back in March and April have had a tremendous run over the last 6-7 months. Our portfolio today is largely geared toward companies with stronger top-line prospects on a 2-3-4 year outlook. In, in our framework, anyway, we are starting to see growth looks cheap relative to value and so the portfolio has really moved toward equities and toward growth-related equities where we think the top-line is going to be good for awhile.
Interviewer:   Okay. Ryan, it is a pleasure to have you with us. Hope we will see you soon.
Interviewer:   Just for the record, uh, Ryan likes, uh, or owns, uh, TSMC, Mediatek, Qualcomm, China Life, Wynn Resorts and stuff like that there. Thank you.
Caldwell:   [Inaudible], thank you.
[End of interview]

The opinions expressed in the interview are those of Mr. Caldwell, and are current as of November 20, 2009. They are not intended as investment advice or to predict or project the future performance of the Fund.

Investment return and principal value will fluctuate, and it is possible to lose money by investing. The Fund allocates from 0-100% of its assets primarily among stocks, bonds, and short-term instruments, across domestic and foreign securities. International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These risks are magnified in emerging markets. 1.With regards to fixed income securities in which the fund may invest, these are subject to interest rate risk and, as such, the net asset value of the fund may fall as interest rates rise. 2.Because the Fund may concentrate its investments, the Fund may experience greater volatility than an investment with greater diversification. 3.The Fund may use short-selling or derivatives to hedge various instruments, for risk management purposes or to increase investment income or gain in the Fund. These techniques involve additional risk, as short selling involves the risk of potentially unlimited increase in the market value of the security sold short, which could result in potentially unlimited loss for the fund, and the value of investments in derivatives may not correlate perfectly with the overall securities markets or with the underlying asset from which the derivative’s value is derived. 4.Investing in physical commodities, such as gold, exposes the Fund to other risk considerations such as potentially severe price fluctuations over short periods of time and storage costs that exceed the custodial and/or brokerage costs associated with the Fund’s other holdings. 5.These and other risks are more fully described in the Fund’s prospectus.