In 2017, 75.8% of active Global ex US managers outperformed the MSCI EAFE Index gross of fees, with the median manager outperforming by 260 basis points. This chart book is our annual summary of the absolute and relative performance of managers that report to our database.
Despite strong overall returns, active managers continued their now four-year streak of underperformance against the index, with 54.4% underperforming (gross of fees) in 2017. For the year, the median US mid- to large-cap manager underperformed the Russell 1000® Index by 70 basis points. This chart book is our annual summary of the absolute and relative performance of managers that report to our database.
No. The US public equity market remains the largest and most liquid in the world and continues to offer a robust opportunity set for investors.
No, most investors should sit tight. The persistence of strong corporate and macroeconomic fundamentals in the face of the recent sell-off and spike in volatility strongly suggests that the duration of the market rout should be limited.
We are asked this question on a regular basis, but believe it is fundamentally the wrong question for investors to ask if they are seeking to outperform the market over the long term.
Though the risk from rising rates is potentially higher in Australia than elsewhere given household debt levels and the state of the housing market, we judge the risks and outlook as balanced and advise investors to remain neutral on equities and risk.
The risks from rising rates are potentially higher in New Zealand than elsewhere given the overvaluation of equities and the housing market. We advise investors to underweight NZ equities, fixed income in general, and the NZ dollar.
This chart book presents representative long-only and hedge fund manager performance for fourth quarter 2017. The median US Growth Equity ex Small-Cap manager posted the highest median return for fourth quarter 2017, returning 6.8%. Emerging & Frontier Markets Equity managers posted the best returns for the one-year period ending December 31, 2017, with a median return of 36.8%. The median US Intermediate-Term Bonds manager posted the lowest median return for fourth quarter 2017 (0.0%), while the median Cash Management return was lowest for the one-year period ending December 31, 2017 (1.1%).
Equity markets dazzled investors in 2017, as an uptick in global economic activity helped lift expectations for corporate earnings growth across developed and emerging markets. The performance of equities and other asset classes are reviewed in this chart book.
December’s edition summarizes three articles related to value investing. The first adjusts a well-known valuation metric by inflation and real interest rates to enhance its near-term effectiveness; the second highlights that over 50% of value equities’ outperformance of growth can be attributed to macroeconomic factors; and the third argues that investors should shy away from simplistic value investment strategies, as they tend to identify companies with inflated accounting numbers and/or earnings forecasts.