David Meyncke, Managing Director and Head of Business Development for Clough Capital Partners, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss the pioneering career of Charles Clough and how the innovations he brought to Wall Street drive the firm to this day.
Clough Capital Partners was founded by Charles Clough, who served as the Global Chief Investment Strategist for Merrill Lynch for 13 years. Clough coined the term “Squawk Box” when financial advisors at Merrill Lynch would listen to Clough’s commentary on an internal speaker system. Clough was instrumental in building the CIO portfolios at Merrill Lynch, which is the basis for today’s model portfolios. Clough was also a pioneer in sector investing, recommending investing in sectors separately rather than in broad market portfolios, which led to today’s sector ETFs. He also discussed how credit cycles affect equity markets.
The Clough Hedged Equity ETF (CBLS) was modeled after the firm’s institutional hedged strategy, which can now short stocks and trade options and futures contracts. While many hedge funds seek to keep their positions secret, especially the short positions, this ETF offers daily transparency to all long and short positions. Because the ETF is a registered fund available to retail investors, an asymmetric incentive fee cannot be charged, making the fee burden of CBLS lower than most long-short equity hedge funds. Implementing a long-short equity strategy in an ETF structure can also increase tax efficiency relative to private placement hedge fund vehicles.
The Clough Select Equity ETF (CBSE) is a long-only equity product offering a global, multi-sector, multi-cap style concentrated in a 40-stock portfolio. CBSE is a complement to cap-weighted index fund investments.
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