Why We Consider Japanese Equities Overvalued
Although several valuation metrics suggest that Japanese equities are fairly valued we consider them overvalued because of the precipitous state of the economy.
Research Publications Archive
Of Bubbles and Bears
If the unwinding of the recent bubble conforms to the typical pattern of past post-speculative periods, investors should be prepared for a long, hard slog.
The Euro Appreciates
The euro’s appreciation against the U.S. dollar holds symbolic importance for Europeans, but negative consequences for their economy. Until domestic demand in the region improves, the strengthening euro could undermine the Continent’s economic growth, corporate profits, and equity prices.
Implications of a Falling US$
The U.S. dollar continues to slide against other major currencies, prompting concerns about how institutional investors can hedge against the possibility of a more vicious drop in the greenback.
Dissecting the U.S. Equity Market
This commentary takes an in-depth look at the U.S. equity market.
Why Are U.K. Equities Outperforming?
Historically U.K. equities have outperformed European equities during periods of market weakness due to the U.K. market’s weighting in classic defensive groups. However, the outperformance this go-round is due to the financial sector. The U.K. banking subsector was boosted by acquisition activity and investors’ preference for U.K. banks’ low volatility, high dividend yields, and strong…
Emerging Markets Debt
An overview of emerging debt including correlations with other asset classes, risks (volatility, default, interest rate, currency), investment vehicles, and benchmarks. Exhibits cover market capitalization, credit quality, country debt ratios, Brady bond yields, benchmark returns, and fees and performance data on representative emerging debt managers.
Are Emerging Markets Equities Still Cheap?
To gauge the effect of MSCI Emerging Markets Free’s stunning rally on their valuations we use four metrics—price-to-earnings, price-to-book, price-to-cash earnings, and dividend yield—to compare current valuations to historical emerging markets valuations and to developed markets equity valuations. Although the end result is unequivocal, we nevertheless find that emerging markets equities remain inexpensive.
Valuations of Small-Cap Equities
Small-cap equities have thrashed large caps over the last two years. While the performance disparity between small and large caps is already significant, the small-cap rally may still have some legs if history serves as a useful guide. Investors should maintain exposure to both small and large caps, rebalancing among both the capitalization sectors and…
European Equity Valuations
Although valuation metrics show mixed results, we remain cautiously optimistic about investing in European and U.K. equities.