The world of professional wrestling loves a comeback story. From The Rock to The Undertaker, Ric Flair to Hulk Hogan, the sport’s history is littered with prodigal – or often just badly injured – sons making spectacular returns.
While these names may not mean much to many readers, they are certainly familiar for Phil Huber, wrestling aficionado and chief investment officer (CIO) at Chicago-based Huber Financial Advisors.
‘Whenever I encounter people in our industry at conferences and whatnot, they’re always doing a double take whenever I mention wrestling,’ Huber says. ‘It’s not a common thread you find among a lot of advisors, but you know, we’ve all got our little hobbies.’
Huber and his father Dave have been to four Wrestlemanias together and have a comeback story of their own.
Although Huber Financial Advisors was founded in 1988, Phil Huber didn’t step into the RIA ring for the first time until 2008. After graduating from Indiana University Bloomington in 2007 with a finance degree, he spent a lonely year in an internal wholesaling role at Affiliated Managers Group before being laid off during the financial crisis in the summer of 2008.
Joining the family business, which today manages $1.26 billion in assets, was a no-brainer after that setback. Huber initially focused on research and quantitative analysis rather than sales and business development, despite enjoying seeing the way his father forged a bond with his clients.
‘It’s never fun to get laid off, but I already had it in my head that the role wasn’t right for me in the long term, so I was also a bit relieved,’ Huber recalls. ‘It opened my eyes a bit and I realized, “You know what, I should give it a shot at Huber Financial. I’m young enough that if it works out, great, I’ve found my path, but if not, I’ve got time to figure out what does work for me.” Fortunately, looking back now, I’m happy to say it has been a wonderful ride.’
Moving off the undercard
Unlike WWE’s oft-feuding McMahon family, Phil and Dave Huber don’t wrestle each other for power or let their egos get in the way. For years, Phil reported directly to Rob Morrison – now the firm’s president – instead of his father.
‘I think that helped me to develop a good work ethic and good habits, and it made sure that I wasn’t taking for granted the fact that I needed to prove myself, even though my name is on the wall,’ Huber says. ‘I took that very seriously and I owe a great deal of gratitude to Rob for all the values he instilled in me early in my career.’
Huber spent seven years as a portfolio manager at the firm before being promoted to CIO in 2015. In wrestling terms, it’s a move roughly equivalent to making your debut appearance on a major pay-per-view TV event. The firm had eight employees when Huber first joined in 2008 but has since grown to 24 people.
‘I had been overseeing research and portfolio management for a number of years,’ Huber says. ‘I think where I had to develop my skills before stepping into that leadership role was on the communications side. I was working on my speaking skills and getting used to being in front of clients more.’
Since taking the role, Huber has also started his own investing blog, the amusingly named Bps and Pieces, inspired by former Citywire RIA cover star Josh Brown of Ritholtz Wealth Management and his blog The Reformed Broker.
‘I thought it was such a cool medium to communicate different investment ideas and concepts,’ Huber says.
The investment picture that Huber creates – both online and in client portfolios – is remarkably easy to comprehend. Huber Financial Advisors offers 10 core model portfolios, each of which is populated with an average of 15 funds. The portfolios are tailored to investors with a range of different risk profiles, with a score of 10 indicating the highest level of risk tolerance.
The firm’s core ‘Global 60’ portfolio is split 50/20/30 between equities, alternatives and fixed income. For Huber, it makes sense to have a different approach to each asset class.
‘On the equity side, we’re big believers in factor investing. In our portfolios you’ll find a lot of Dimensional funds as well as some ETFs to help build out multi-factor, low-cost, diversified global equity exposure,’ he says.
‘For alternatives, we tend to gravitate more toward quantitative and systematic strategies that are trying to capture certain types of alternative risk premia such as value and momentum.
‘And for fixed income, we tend to use more traditional active managers – firms such as Pimco, DoubleLine and BlackRock. We have found through our research and the research of others that there just tends to be a little more consistency in the excess returns of active managers in fixed income.’
One staple in client portfolios has been the $113.3 billion Pimco Income fund, the world’s largest actively managed bond fund. Co-managed by Citywire AA-rated Dan Ivascyn and Alfred Murata, along with Joshua Anderson, the fund ranks sixth out of the 76 Multi-Sector Income funds tracked by Citywire, having returned 17.5% over the past three years to the end of August. The average fund in the space returned 11.4% over that period, while the Barclays Bloomberg US Aggregate Bond index is up just 5.4%.
‘The track record is outstanding. We’ve worked with Pimco longer than I can remember, predating me,’ Huber says.
The firm also allocates client money to the $70 billion Pimco Total Return fund, the original domain of Bill Gross, who left the bond giant in 2014. Despite Gross’s acrimonious departure from the firm he co-founded, Huber Financial Advisors didn’t pull out its money.
‘We decided to hold steady. It wasn’t easy, but we think it was a well thought-out decision. We laid out all the facts and ultimately decided that we allocated to Pimco, not to Bill Gross,’ Huber says. ‘The organization is much more than one person, and when we learned who would be taking over management responsibilities for the fund, we were satisfied with that.’
That bet has paid off. Co-managed by A-rated Mark Kiesel and Scott Mather, along with + rated Mihir Worah, the fund has returned 6.7% over the past three years. Even though that’s slightly below the average fund in the Core Plus Bond category, which returned 7.8%, it is faring far better than Gross’s $1.2 billion Janus Henderson Global Unconstrained Bond fund and a number of other alternatives that Huber considered at the time.
‘We’re happy we stuck with it,’ Huber says. ‘I won’t name any names, but if you look at the top five beneficiaries of flows from Pimco Total Return, almost all of them underperformed Pimco Total Return over the subsequent three- to five-year period.’
A period of underperformance is not enough to put Huber off a fund or a wider philosophy. For example, he backs an allocation to value equities, despite the style being outperformed by growth over the past decade, which is longer than the norm.
‘Having this type of approach very much requires a long-term focus and discipline. It is all too easy to question your choice if you’re not confident in the underlying rationale as to why value should work over time,’ he says. ‘It has been challenging, but this is not the first time this has happened.’
In short, Huber is betting on a comeback – something he sure knows a thing or two about.