Barron’s interview with Ben Inker: The Best Bets in a Dangerous Global Market
Lucky
sevens? Not so fast. Asset manager GMO's seven-year forecast doesn't show
investors having much luck over that span, much less big returns. The
Boston-based value shop, which oversees about $112 billion, doesn't like the
broad U.S. stock market, which it maintains is too reliant on expanding
price-earnings ratios, and it doesn't see great things ahead for bonds, either,
given how low interest rates are. Two of the brighter spots, in its view, are
high-quality stocks in the U.S. and emerging-market equities. For insight into
the firm's views, Barron's spoke
recently with Ben Inker, co-head of asset allocation at GMO, where he's worked
for 21 years. The 43-year-old investment pro and his colleagues believe that
assets' returns eventually revert to their mean, and they insist that will be
the case for U.S. stocks, which have enjoyed big gains in recent years. The GMO
Benchmark-Free Allocation Fund III (ticker: GBMFX), whose minimum investment is
$10 million, has a 10-year annual return of 9.88%, besting 84% of its
Morningstar peers. A much newer fund with an identical strategy—but just a
$1,000 minimum—is Wells Fargo Absolute Return fund (WARAX).
