Japanese Equities: Short-Term Promise Jeopardized by Longer-Term Risks
We remain neutral on Japanese stocks despite attractive valuations and near-term earnings potential in view of daunting intermediate-term macro challenges.
Equities
Assessing the Track Records of “Predictive” Indicators
How much faith can investors put in the signs given by various “predictive” indicators? In this brief, we look at five indicators that have been in vogue in recent years, and review their track record.
US Manager Universe Statistics: First Quarter 2017
This chart book presents representative long-only and hedge fund manager performance for first quarter 2017. The median Emerging and Frontier Markets Equity manager posted the highest return for the quarter (11.9%), while the median US Small-Cap Value manager posted the highest return for the trailing one-year period (23.7%). The median Cash Management manager posted the lowest return for the quarter (0.3%); for the trailing one year, the median manager in only one strategy, Global ex US Bonds, posted a negative return (-1.3%).
Do the Results of the First Round of the French Presidential Election Sound the All Clear for European Risk Assets?
Although the election results provide a powerful “risk-on” catalyst in the short term, the underlying long-term problems facing France and the Eurozone are unlikely to go away under a Macron presidency, so the old adage “sell in May and go away” may be vindicated yet again.
Should Investors Buy Downside Protection to Hedge Against an Equity Market Drop?
We don’t think so. Investors with diversified portfolios already have some cushion if equities sell off, and trying to time the market by buying derivatives or substantially reducing equity exposure is rife with behavioral risks.
Emerging Markets Equity Manager Performance: 2016
Calendar year 2016 marked the first time since 2009 that emerging markets managers underperformed the MSCI Emerging Markets Index gross of fees. This chart book is our annual summary of the absolute and relative performance of managers that report to our database. New exhibits this year examine managers’ sector and geographic allocations relative to the index and assess the presence/absence of factors that can create a more favorable environment for active management.
Global Equity Manager Performance: 2016
Calendar year 2016 marked only the third time in the past ten years that global equity managers underperformed the MSCI World Index. This chart book is our annual summary of the absolute and relative performance of managers that report to our database. New exhibits this year examine managers’ sector and geographic allocations relative to the index, as well as the impact of US equities on performance.
Decades of Data: 1900–2016
In over 35 different analyses and 100 charts, our annual report on the history of global markets provides context for the range of returns investors can expect from equities, bonds, and cash; reveals the importance of various components of equity returns; examines the evidence for equity mean reversion; and reviews the relationship between initial valuations and subsequent returns for equities and bonds. This year’s edition includes new sections on recent trends in the macro environment and business cycles, as well as several new exhibits in other sections. The appendix to this report shows year-by-year, cumulative, and average annual compound returns for as much as 117 years of market data for Australia, Japan, the UK, and the US.
Are “Reflation Trades” Reversing or Just Pausing?
Some of the reflation trades that received a boost from the US election look to be merely taking a breather as investors square positions; however, the fundamental support for others—particularly the outperformance of US small-cap equities—is challenged.
US Manager Universe Statistics: Fourth Quarter 2016
This chart book presents representative long-only and hedge fund manager performance for fourth quarter 2016. The median US Small-Cap Value manager posted the highest median return for fourth quarter 2016 (10.7%) and the year (24.2%). The median Global ex US Bonds manager posted the lowest median return for fourth quarter 2016 (-6.9%), while the Global Growth Equity ex US median return was lowest for the year (-1.1%).