Can you describe your thematic approach?
Amy Raskin, CIO of Chevy Chase Trust: We generally have five to seven themes in a portfolio. We have three criteria for what constitutes a theme: It has to span multiple sectors, benefits have to accrue to companies—this is the hardest test to pass because most forward progress accrues to benefit consumers—and finally, it has to be investible.
We have thematic analysts, unlike most of Wall Street, which categorizes analysts by sector. Our analysts are unconstrained in terms of what they look at. For example, following genomics involves looking at the semiconductor and healthcare industries. But a sector analyst in semiconductors or in healthcare would never talk to a genomics company.
What are your current themes?
Raskin: Molecular medicine and genomics, supply-chain automation, the end of disinflationary tailwinds, long-term Covid benefits, wealth concentration, and heterogeneous computing.
How are you investing for clients who want income?
Raskin: I don’t think there’s a good approach for them. Even the dividend yield of the S&P 500 index is 1.35%, almost at record lows. We don’t recommend owning dividend companies to generate income. You have to trade the market that you have, not the market that you want. We invest only in investment-grade fixed income. It’s the ballast. Given our size, we can find some unusual size lots that might be too small for the big guys to use, so we buy individual bonds.
