John Bryson:
Hello and welcome to the Portfolio Intelligence Podcast. I'm your host, John Bryson, Head of Investment Consulting and Education Savings here at John Hancock Investment Management. Today is March 21, 2024. Stocks are off to a good start this year; bonds are a bit more of a mixed bag. Today starts March Madness for basketball and, soon, hockey. So I've invited Michael Scanlon of Manulife Investment Management to the podcast. Michael runs balanced portfolios for Manulife. He went to Boston University and teaches in their MBA program. Michael, welcome to the call.

Michael Scanlon:
Morning, John. Thanks for having me. I'm looking forward to a good chat here.

John Bryson:
You got it. So, a lot of people are talking about their brackets today, their men's basketball brackets. But you're a hockey fan. You went to BU, you teach there. I think you're more focused on hockey. What do you ... what do you think about the hockey tournament this year?

Michael Scanlon:
Well, it's I guess it's pretty predictable where I'm heading with this, but we're coming up on the pros and … I’m feeling pretty good about BU heading into that part of the season.

John Bryson:
Fair enough. As a Boston College grad, I'm going to put my money on them hypothetically anyway. And since this is recorded, one of us will want to hear this podcast in the near future. All right. Perfect. Hey, listen, broadly speaking, 2023 turned out to be a very good year for balanced portfolios. To what extent do you think that's put to bed the narrative that the 60/40 portfolio was dead?

Michael Scanlon:
Yeah. So obviously, you know, a couple of years ago, we were in a lot different interest-rate environment, right. And I can't tell you how many people forwarded me those … those news articles that were writeups in the Wall Street Journal or whatever, talking about how the 60/40 was dead. And, you know, I think that lasted for about six months.

So, you know, I think there was obviously some just recency bias around where we were from an interest-rate perspective and those kind of things. But, you know, the world has changed pretty materially. And, you know, nowadays I think you look at it, I mean, if you look at stocks, right to the economy in the economic data kind of flatlines here.

You know, that's the kind of environment that you would think stocks would do pretty well in. If things do get worse and the Fed cuts rates, or the market starts to discount future cuts by the Fed, you know, fixed income has the opportunity to do pretty well. And, you know, in this environment, that flexibility to be able to allocate back and forth and actively manage portfolios on either side of it, you know, that's a pretty attractive solution for what we're seeing out there today.

John Bryson:
That's great to hear. And I think that's continued into this year also. So you mentioned opportunities. Let's talk about opportunities. Where are you seeing the best opportunities globally? Let's focus on equities and what gets you excited about those opportunities.

Michael Scanlon:
Sure. So, at a very high level, we've obviously had very dramatic outperformance in the U.S. versus the rest of the world over, really, the last 13 or 14 years. I don't see anything telling me that we're on the cusp of that ending for a number of secular reasons, right? Whether it's the U.S. having very strong demographics relative to the rest of the world being the innovation economy, a number of other factors.

But I think the … the opportunity set out there continues to skew domestically. And I think that despite the dramatic outperformance going forward, I think that it's the best opportunity set continuing. If I take it one step lower, I think the greatest opportunity in the equity markets today is just picking stocks, right? I mean, if you look out there at the universe, I think this idea of just riding the beta wave that worked so effectively after the financial crisis through, say, roughly 2019. I think that's over.

You know, we kind of hit an inflection point around 2019 where stock picking started to matter a lot more. And I think that that's going to be the biggest driver going forward. So I think if, you know, a lot of people like to talk about chasing factors or that kind of stuff, I don't see that as adding any value. I think you just want to have a portfolio of individual stocks rather than chasing factor bets.

John Bryson:
And it's interesting you say that the active over passive, we're seeing that inflow right now. So I wonder if we're at the cusp of more and more people getting on board with that. And that's—

Michael Scanlon:
Interesting. If you look at it. I mean, the last handful of years, which has been, you know, that period after the financial crisis was a pretty challenging environment for active management, right. So what is ... what was the reaction to it? A lot of active managers started to hold a heck of a lot more stocks and dilute down their active share than they had historically. And now we've hit that inflection point where stock picking and actively managing the portfolio matters a lot more. So now you have people—kind of—that need to react to that and chase back to the active management.

John Bryson:
Yeah, that totally makes sense. All right. So let's dig in a little bit deeper on equities. What themes you focused on and most excited about.

Michael Scanlon:
Yeah, So I think there's great opportunity right now in individual stocks. And then, you know, outside of that, there are some more broad themes that I think are pretty attractive, right? I mean, if you think about the the opportunity for advertising dollars to continue to shift from traditional vehicles such as linear television, print media, those things to online, I think digital advertising is really poised to do well, especially if we do have, you know, at some point, the most anticipated recession in history, and that, you know, direct response, digital advertising will be the last thing cut.
Right? Because if you're an advertiser and you buy, say, an ad in a big game for a sporting event or something like that, you don't really have the ability to measure the return. So that's the kind of stuff that gets cut quickly. Whereas if you have, you know, click here on this link to buy something, you can measure the return on those advertising dollars very quickly.
So, as you've seen, you know, bigger companies that have been around that weathered a couple of recessions in their lifecycle at this point, that tends to be a pretty good place because those, again, will be the last advertising dollars cut. And then on the commodity side of things, you know, I do think that the energy offer opportunities are pretty robust out there.

And in addition to that, I also think something like copper, as we think about the transition to the electrification of everything, you know, there is no transition to the electrification of everything without copper. And so I think that, you know, some companies that are poised to benefit from stronger price appreciation in the copper market are great investments as well.

John Bryson:
Very good. One more equity theme I want to ask you about. You know, there's a lot of talk on weight-loss drugs there in the news that that's the next big drug and a lot of uptake. What what's your take on it and what else is on your radar, and healthcare?

Michael Scanlon:
Yeah. So on the GLP-1 category of drugs, I think there's obviously ... I don't know if hysteria is the right adjective to put on it, but we're in a pretty unique time with it. And you're certainly ... there's a lot of excitement about the drug class. What I would tell you is I think some of it might be a little bit overdone.

Like you look at companies that are, you know, carbonated-beverage companies are kind of traditional, middle-of-the-grocery-store type companies that have been under a lot of pressure with this thesis that, you know, everybody's going to be on these GLP-1s and never buy, you know, high-sugar food or that kind of stuff. I think some of that … that reaction has been overdone, especially at the company-specific level.

But longer term, it's it's incredibly attractive, right? And you know, we do have ... there's a number of companies that you can get exposure to the group in. But another place that I would also say that's been overdone is there's a lot of negative rhetoric around this idea of, well, people are never going to need hip replacements or knee replacements anymore because all of a sudden everybody's going to be so much lighter and not carrying
around weight.

The problem with that thesis is that if you look at the traditional drivers of that, it's more active lifestyles. So if you're somebody that is going to be in better shape because you're not going to be carrying around all that extra weight, you're going to probably have a more active lifestyle, which means, you know, unfortunately, at some point you're probably going to need a new hip, knee, shoulder, whatever it might be.

So it's opened up a bunch of different opportunities as we're kind of in the stage of hysteria today. And keep in mind that there is another leg to this, right, that you know, right now, these are drugs that have to be cold, chain delivered, right? It has to be maintained in a low temperature and delivered to the ultimate customer.

But there are a number of drugs in development on that side which are in pill form. And that makes it much easier in terms of a deliverable. So there's still a lot of opportunity there going forward.

John Bryson:
That’s a really interesting take on ... on that asset class and that's awesome. We mentioned earlier you run a balanced fund. You talked about liking the flexibility to move assets back and forth between equities and fixed income. What's your take on the Fed right now and how is that shaping your current approach?

Michael Scanlon:
Yeah. So on the fixed-income side, I mean, I think it's … you're in this part of the cycle right now where you've got diverging global central bank policies, right? And my opinion would be that I don't foresee the Fed doing anything this year. I think they're just going to sit on their hands and ride it out. I think everyday that ticks by makes it more and more difficult for them to actually make a move just because people get more and more concerned that the Fed, which is supposed to be an apolitical body, is now influencing the election in one direction or the other.

So I think as we get closer to that election date, it's less and less likely that they actually do anything. And right now, the data is telling you that they're not going to do anything. And it's remarkable, right? You think back to November of last year, I think there were eight cuts priced into the market, 100% chance of a cut in the March meeting.

And now we're down to a little over two cuts priced into the market. And obviously, we just passed the March meeting where they did not do anything. So, you know, I think my former partner on the strategy used to have a saying that if you get consensus numbers and a consensus thesis, that's a recipe for a short career.

I think anybody that's been following the Fed and just kind of saying, you know, the Fed's going to do what's priced into the market, there's been a pretty painful wakeup call. And, you know, if I flip things around and ... apologies for a long answer here, I think a lot of people are saying that, you know, when the Fed cuts, that's just automatically going to be great for equities.

I would be really, really, really cautious with that view. right? You've got to be careful what you wish for, because I would say right now, when you look at earnings, or when I talk to company management teams, I'm not seeing or hearing anything that's telling me that the Fed needs to be cutting rates, right? I mean, we've got 3.5% unemployment, just under 4% inflation, and the equity markets at roughly an all-time high.

That's, you know, the exact inverse of when the Fed typically cuts rates. So if the Fed did cut rates, somebody like me is going to take a step back and say, you know, my God, what is the Fed seeing that's about to steamroll me that I'm not seeing or hearing? And my only reaction should be, well, maybe I should start to de-risk things to get in front of whatever the Fed is seeing.

John Bryson:
But it's not a long answer. A great answer. Thank you, Mike. One last thing I want to dig in on. You mentioned it's an election year and that would probably put the Fed on pause as we get closer and closer. As an investor, how do you think about politics in an election year?

Michael Scanlon:
I have never heard anyone in my career or lifetime, actually, of being able to describe how you accurately position a portfolio for the outcome of some sort of election cycle. I don't know how you do it. Obviously, when you think about the companies that you own and the trends that they're ... they have tailwinds from, you know, there are certainly political influences there.

But, I mean, if you think about it, the U.S. has never been more divided politically than we have been for, say, you know, the last 10 years or so. The roots of that run pretty deep. And yet, you know, with both parties having been in power in the last 10 years and, you know, this divisive rhetoric, you know, the equity markets and has still done pretty well.

So I don't know how you position a portfolio for the outcome of an election cycle, certainly we're politically aware, but I would not say that that's the overwhelming driver in terms of how you manage a strategy, because it's really, really difficult to predict that outcome. And as we all know, the polling data has been horrific the last handful of election cycles.

John Bryson:
Yeah, great, great info on that one, Mike. But we get that question a lot from investors and advisors and we try to tell people, you know, that's more market noise than anything else, so try to not payas close attention. It sounds like you're taking that same approach. So great insights.

Michael Scalon:
Yeah. Well, Michael Gerson, years ago, that said, you know, the world can only end once and this doesn't feel like that time. I think, you know, a lot of people would tell you, if Biden gets elected, people are telling you the world is going to end. And, you know, on the flip side, some people are telling you if Trump gets elected, the world is going to end.
What I would say is I think the world is going to be okay the next day and we'll figure it out.

John Bryson:
Yeah. Now, fair enough. Fair enough. The world only ends when the be your BU Terriers lose to the Boston College Eagles at some point later this season. Sorry. Quick side note, folks, I want to first thank Michael for being on the podcast. Great discussion today. Thanks, great catching up with you folks. If you want to hear more, please subscribe to the Portfolio Intelligence Podcast on on iTunes or you can find it on our website.
JH Investments dot com. You can also find tons of great viewpoints on all things investing and practice management there, so please check it out. As always. Thanks for listening to the show.

Important disclosure:
This podcast is being brought to you by John Hancock Investment Management Distributors, LLC, member FINRA, SIPC. The views and opinions expressed in this podcast are those of the speaker, are subject to change as market and other conditions warrant, and do not constitute investment advice or a recommendation regarding any specific product or security. There is no guarantee that any investment strategy discussed will be successful or achieve any particular level of results. Any economic or market performance information is historical and is not indicative of future results, and no forecasts are guaranteed. Investing involves risks, including the potential loss of principal.

Our Co-Chief Investment Strategist Matthew D. Miskin, CFA, assesses where the most attractive equity opportunities lie in the wake of a rally in early 2024 that has boosted stock valuations, despite growing uncertainty over the interest-rate outlook.

John Bryson:
Hello and welcome to the Portfolio Intelligence Podcast. I'm your host, John Bryson, head of investment consulting and education savings here at John Hancock Investment Management. Today is February 26, 2024, and I've invited Matt Miskin, our co-chief investment strategist here at John Hancock Investment Management, to join the podcast and to talk about what's going on in the market. Matt, welcome.

Matt Miskin:
Thanks for having me, John.

John Bryson:
Hey, Matt, let's start big picture from a macroeconomic level. Where do we stand?

Matt Miskin:
John, I wish the answer was a lot easier, but it's complicated. I think that's what the kids now have on their Facebook or Instagram accounts. I don't really know, but it's really challenging. It looks choppy. It's hard to say that we're in a new cycle, but we can say that the data is incrementally getting better. So we ended last year and global PMIs were improving.
They've gone up for four consecutive months. PMIs are business surveys all over the world, whether it's services or manufacturing, they've been improving. We saw the ISM―that's the Institute of Supply Management―they do business surveys. The manufacturing side of the economy has actually started to improve over the last several months. So this has been one of the most challenging economic cycles, business cycles we've ever witnessed in the history of the U.S. economy.

Part of it is fiscal stimulus has been coming into the economy, whether it's the CHIPS Act, the Inflation Reduction Act. There's money that's still being spent. We've got stimulus out of China, but it has been this late cycle, prolonged late cycle period with choppy economic growth. So it has been challenging to use that as an indicator.
We've been focusing on the fundamentals more of businesses, and that's how we've really been looking to invest. Using that lens more so than the economic indicators.

John Bryson:
Okay. Now, if we look short term, certainly very short term, looking at last week, you could say that we're in a risk-on mode again, certainly for U.S. equities. Talk to me about what's going on there.

Matt Miskin:
Yeah, we've really come into 2024 with a more risk-on tone. It really, you know, ended last year like that. And, you know, at the end of last year, at the end of 2023, what we saw was a pivot party. So what does that mean? So that means the Federal Reserve said we are likely to cut interest rates in 2024.
Powell usually does not be that deliberate in suggesting rate cuts until it actually happens. But the bond market said, ‘Okay, you're going to suggest rate cuts. We're going to take that. We're going to run with it.’ And at one point, at the end of last year, they were pricing in six cuts. The bond market was. And so the thought of the Fed cutting helped lift equities.
And what we saw was this pivot party lasted … You know, I almost think about it as the Fed saying, you know, at the party, last call for drinks. Now, I haven't been up late enough at a bar where they've called for last call for probably ten, 15 years. So I don't really know what that's like anymore.
But nonetheless, that's what they were saying and they were hoping, you know, that would be last call. And then they were they'd shut off the taps. And in our view, what they are seeing now is they're backpedaling. They're saying, ‘We don't want to cut as much. We might not cut. We’ve got to push it out.’ And they're trying to just say, ‘Hey, we're shutting off the drinks here.’
But the thing is, the party is still going. So now there's only three rate cuts priced in at 2024. And by the day that is actually decreasing. But equities don't seem to mind it anymore. So it's unusual. But if the Fed becomes more hawkish, then that could temper some of this enthusiasm we're seeing in markets. And we want to be mindful of that risk as the year goes on.

John Bryson:
I like your analogy. I remember back to those days when last call was made and lights went on. I don't remember people filing out orderly. Maybe it lasted a little bit longer than the bar owners or party posters wanted it to last. Hey, let's talk about earnings. You know, we've seen a lot of companies report earnings up to this point. How are those numbers faring?

Matt Miskin:
Not bad, but not great either. So the way to think about this is, at the beginning of the fourth quarter of last year, the analyst community was looking for 8% earnings growth and really the whole year last year was predicated on Q4. Q1 earnings were great, Q2, Q3, not much earnings growth. It was all going to be this Q4 and the Street was looking for 8% earnings growth.

What they're coming in at right now―and we're getting almost all the way through earnings. We're at 90% of the way through S&P 500 earnings. Earnings are going at 4%. 4%, it's okay. It's not negative, but it's not 8%―what we're originally looking for. And then also what's happened is even though 4% earnings growth has come in for Q4, the 2024 earnings estimates at one point were almost 12%.

So the streak analysts were looking for 12% earnings growth in 2024. Now that's down to about 10%. So they said, ‘Hey, these are great earnings, but we've got to trim some of your estimates because this is so strong.’ The other thing that's happening in these earnings results are cost-cutting measures. So companies are coming out and they're saying, ‘Hey, we're coming out with decent earnings, but we're kind of concerned with the revenue growth slowing.

We've got to cut costs.’ So that's often when you're hearing about layoff announcements, you're hearing about other cost-cutting measures, and that's helping stock prices because the investors like to hear better margins. They like to hear the cost cutting. But if everyone's doing it at the same time, that can actually create economic weakness in time. So those are some of the things we've highlighted so far in the earnings results.

John Bryson:
So if you break it down sector by sector, could you highlight for us which ones are coming in stronger versus others―maybe the dichotomy that's going on?

Matt Miskin:
Yes, blowout sector by far has been technology. So technology companies are growing earnings about 20% year over year. In Q4, the original estimate was 13%. 90% of companies have beaten in the technology sector. So you hear about like, you know, the mega-cap powerful technology companies that have been doing well. And that's certainly part of it. But it is broad, in that a lot of companies are beating.

Semiconductor companies in particular have had a tremendous quarter, a lot stronger than we thought. And really, you know, the technology companies are expensive. We get it. They're trading at a high multiple, but they're high-quality businesses, great balance sheets, strong earnings, high return on equity. So that is our favorite quality part of the market. We're following the fundamentals more so than the macro right now. That's isolating that position.

And then the U.S. markets are growing earnings the best in the world, and that's the reason why we've been overweight the U.S.

John Bryson:
All right. So we've been talking about the U.S. a lot. Let's pivot a little bit. A big driver of macroeconomics in markets around the world is China. What is the latest coming out of China and what are you focused on?

Matt Miskin:
So they've been cutting interest rates. So as the Federal Reserve is saying, ‘We've got to, you know, basically push back on the more dovish narrative and remain restrictive.’ China is outright cutting rates. So they actually cut the loan prime reserve rate, which is actually what goes into their mortgage rate. And their 10-year Treasury yields or government bond yields hit 2.41% last week, which was the lowest in history.

So they're cutting rates because their real estate market is still weighing on the economy. Economic growth is okay. It's kind of muddling around, but it's hard because that's predicated on a lot of stimulus measures. So it's not that it's really powering ahead in terms of a reacceleration, but it's holding in because they're stimulating. To us, it is still a place we have been modest, had a modest, underweight, likely to continue, a modest underweight.

And really it's about the earnings. We think there's going to be volatility around these stimulus measures where you get this pop. We've seen a decent pop in Chinese stocks in the last month or so from mid-July here to the end of February. We're not looking for adding exposure yet. We think that we're going to need a global cycle reset.

So, you know, globally, when central banks start to cut, when global growth starts to really improve and we're starting a new cycle, we'll look at China and emerging markets more broadly. For now, we're holding off and we still have an allocation in terms of our views and Market Intelligence. It is just a modest underweight, though.

John Bryson:
Very good. And we've talked mainly about equities and sprinkle in some fixed income. I want to go back to fixed income. And to your point, at the beginning of the year, the market was pricing in six rate hikes. What are your expectations for the Fed going forward right now?

Matt Miskin:
We think they're on hold until something breaks. In essence, “breaks” isn't maybe a good word for it, but in essence, there's a liquidity event or something, you know, happens where the labor market starts to show cracks. It's hard to see it right now, frankly. We don't see it. The economy's awesome right now, but at some point, there is likely to be some risk that that manifests itself.

Matt Miskin:
It's hard to always predict it in the future, but usually after the Fed raises rates a lot and they did and they go on hold for maybe a year, year and a half, pretty much on average. And then they start cutting. Right now, the back half of this year looks to be where they would just start cutting modestly if inflation continues to decelerate.

If we see a recession, then we have a lot more cuts likely to come. Again, it's hard to see it right now. But in talking about the bond market, it's easy to get hyper focused about the Fed. What we're seeing in bonds is a lot of value. We are seeing the best yields we've seen in the better part of 10 years.

We were just running, you know, in terms of our Market Intelligence weekly publication, almost every major fixed-income asset class, the yields are better today than they've been on average over the last 20 years, and in some cases a percent or 2% higher than their 20-year average. So whether it's investment-grade corporate bonds, mortgage-backed securities, or municipal bonds, we're seeing a lot of great bond income opportunities.
And there are alternatives to stocks, because you can lock in these income yields and look for those payments for years to come. So we actually like the bond market a lot here. Even as the Fed is on hold, we do think they eventually will cut.

John Bryson:
That’s very good. So you mentioned Market Intelligence. I'll share with our listeners that your mid-quarter Market Intelligence updates are available online. I also noticed online you've drafted a piece on mid caps. Can you walk us through the highlights of that piece?

Matt Miskin:
Yeah, it goes back to this economic cycle and why it's so differentiated or unique. We're doing so much government spending, fiscal spending this year, in things like the Inflation Reduction Act. What does the Inflation Reduction Act do? It incentivizes businesses to make electric vehicle components like batteries here in the United States. Where are those battery plants or electric vehicle plants being produced? The Midwest.
So whether it's Michigan, Ohio, so on and so forth, Kansas, there's a lot of electric vehicle manufacturing plants being produced. The other one, the CHIPS Act, that's semiconductors. We basically ran out of semiconductors. We had a supply chain issue. We didn't want to do that again. We want to make the semiconductors here. So there are massive semiconductor plants being produced in the Midwest primarily.

And if you looked at where these plants are being made and you overlay the best real estate markets and jobs markets, they’re right next to each other. Right? So the best real estate markets in terms of like housing is by where a lot of these plants are being put up―where there are the lowest unemployment rates, where there are thousands of jobs needed because they're going to put these plants in place.

This is all mostly in the Midwest. We are playing, in terms of mid caps, high-quality industrial companies that are building out these manufacturing plants. These companies have a high return on equity. They've been around for decades. Their earnings are stable, and then they're seeing a pipeline in demand. The largest sector in the mid-cap index is industrials. The industrials typically are Midwest mid-caps that are benefiting from the fiscal tailwinds.

We also like that they're cheap. They're trading just below their long-term average multiple at about 15 times. So you're getting this great diversification from large cap, which is technology-driven, by going just to your cheaper valuations. You've got a different sector contribution with industrials being the biggest one, and then you've got a nice tailwind. So that to us is kind of one of our favorites.

It is our favorite way to play an incremental dollar in the U.S. equity market. It benefits the U.S. economy, or it gives you exposure to the U.S. economy―more so less expensive. A lot of good things going for it.

John Bryson:
All right. Hey, Matt, you covered a lot of territory in this podcast already. Any final advice that you give to investors that we haven't hit?

Matt Miskin:
So the number one thing I'm hearing from advisors right now is the really difficult decision they have to make about cash. And there's two pieces to this. So one, there is massive cash on the sidelines right now. We're looking at nearly it's just over, I believe, $6 trillion that is in money markets―the most in history. And money markets right now are yielding―it depends on the money market.

And this is part of the analysis or thesis here. You know, they're yielding almost 45 to 5%. And, you know, I know that looks like an attractive yield. So the first piece of this puzzle and what advisors are discussing with clients that I've really found to be fascinating is managing cash has never been as important that I've seen in my career as it is today.

And what I mean by that is if you have money, if you've cash is sitting in a bank account or somewhere in a money market, and you're not being diligent and understanding how much interest you're getting, you could be losing out on about 4% to 5% annual interest by just having it the wrong place. Certain bank accounts earn zero still, or near zero.

So it's maximizing managing your cash the best you can. That's the first step in the process. With advisors, what I've seen is, are they're getting more capital, more assets by just maximizing that cash income. Then the next step is, okay, cash is great, but it also has reinvestment risk. It is the quickest. When interest rates change, they're the quickest to feel it.

So if the Fed did cut rates, eventually money market interest rates would go down nearly immediately. Bonds, on the other hand, you're locking in the yields, and you can get price return if interest rates fall. So bond prices rise when interest rates fall typically. And so we're likely to see a pretty significant wave of capital into the bond market over the next several years as it moves from cash back to bonds.

In our view, it's unlikely cash flows to stocks directly because that's a huge change to your investment risk tolerance. And so it's more likely to go to bonds. And I think that's the discussion. We would dollar- cost average that if you could, over time and lock in that those assets into attractive yields like we've been saying in the bond market.

But that's the only piece of the puzzle which I think it's more simple and basic, which I love in this market because there's a lot of confusing things that don't make sense in this economy, this market right now. To me, just doing what you know you can do to help, and then thinking about the future, the long-term interest you can earn is something that doesn't require a lot of complexity but can be hugely valuable to investors.

John Bryson:
And I like that advice because that's the way a lot of businesses think about it―and institutional investors―is manage the cash effectively, think long term. Those are some strong components to a successful investment strategy. So thanks for sharing that. Hey Matt, you're usually on with me with Emily, but Emily is traveling and I understand you're traveling a little bit later this week, but thank you for joining us, folks, as always, thanks for dialing in.

I mentioned Market Intelligence. The quarterly update is available. I mentioned Matt and Emily's blog on mid caps. We've got a bunch of great stuff on our website, jhnvestments.com, so check it out. And as always, we appreciate you listening to our podcast. Thank you.