2015 All-America Research Team: Portfolio Strategy, No. 1: François Trahan

François Trahan

Cornerstone Macro

First-Place Appearances: 9

Total Appearances: 12

Analyst Debut: 2004

Earning his ninth top finish, and fourth in a row,François Trahanat Cornerstone Macro is “the only third-party strategist worth paying for,” declares one investor. “François is not afraid to make a bold call or to change his position when the data indicate that it is right to do so.” Looking ahead, the 46-year-old researcher is anticipating “a global recovery, weaker dollar and higher oil prices.” With interest rates in Europe declining and such key indicators as the purchasing managers index rising in both that region and the U.S., economic expansion is likely to spur trade and buoy the economies of emerging markets, Trahan contends. “We are staring at a global recovery in the coming year,” he insists, so the “positioning you want today is almost exactly the opposite from what you wanted — and what worked — last year.” As a result, the strategist is no longer emphasizing risk-off strategies such as preferring health care stocks and is advising clients away from consumer discretionary companies that are “beneficiaries of weaker commodities prices and a stronger dollar.” Instead, he says, “I like investments levered to better world growth.” Portfolio managers should increase their exposures to risk-on sectors, including financials and industrials, he counsels, as well as oil names and other commodities, which “should kick into gear when the recovery broadens to emerging markets.” Trahan also projects that conditions for U.S. exporters will improve as the dollar moves lower in the face of a more robust expansion. Overall, he says, “if we are correct and the world economy is going to gain steam, then consensus will take one on the chin.”