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When Volatility Rises, So Have Active Management Results
by Team of The Royce Funds,
For many investors, volatility is often synonymous with risk. We as value investors (and risk managers), on the other hand, have always viewed volatility as a crucial component of active stock selection. In our latest Royce Research piece, we explore the relationship between low- and high-volatility environments and the relative performance of active managers versus their respective benchmarks during these periods. This deep dive is especially important in a market that has recently seen more volatility and its largest correction in almost three years.
International Equity Commentary: January 2015
by Team of Thomas White International,
International equity prices were mostly unchanged during January as gains in both developed and emerging Asian markets were offset by weakness in Canada and select markets in Europe. Investors turned more cautious after the International Monetary Fund and the World Bank lowered their global growth forecasts for the current year, contrary to expectations.
Global Economic Overview: January 2015
by Team of Thomas White International,
Concerns about the sharp fall in capital investments and earnings growth in select sectors resulting from lower oil prices continue to cloud the global economic outlook. While the decline in fuel prices is revitalizing consumer spending across all the major countries, the energy and mining sectors have already started curtailing their capital outlays.
Emerging Markets Equity Commentary: January 2015
by Team of Thomas White International,
Emerging market equity prices outperformed in January on expectations that economic conditions in large Asian countries such as China and India could brighten this year. Fourth quarter GDP growth in China met expectations, helped by higher industrial production and consumer spending.
The Case for Global Investing
by Team of Litman Gregory,
As U.S. stocks have outperformed developed international and emerging-markets stocks in recent years, we’re starting to hear more people question the benefit of investing outside of the United States. This is an important question, and we acknowledge that owning foreign stocks has been an unsatisfying experience over the past couple of years. Moreover, given some of the current economic and geopolitical forces, it can appear likely to continue this way.
Developed Asia Pacific: Economy Trends Update January 2015
by Team of Thomas White International,
Japan, the biggest of the developed economies in the region, stands to benefit from cheaper oil as it should boost domestic demand and help some of the country’s key industries reduce costs. Still, the bigger advantage for the country seems to be the re-election of Prime Minister Abe, which has ensured continuity of the fiscal and monetary policies pursued by the government for the last two years.
Middle East/Africa: Economy Trends Update January 2015
by Team of Thomas White International,
This year likely promises mixed prospects for the Middle East and Africa. Among the five economies under our coverage in this region, oil exporters U.A.E. and Qatar are expected to remain under pressure amid the oil price slump. On the other hand, oil-importing South Africa will probably benefit from the downtrend in oil prices as a potential rise in domestic consumption should help the beleaguered economy deal with its various problems.
Brighter Days Ahead for the Global Economy?
by Team of Thomas White International,
After seven years of uneven growth trends following the 2008 financial crisis, we believe the global economy is likely to see a moderate acceleration in 2015. While several risks remain, we are reasonably confident that there are now enough growth drivers in place to help most major economies advance.
International Equity Commentary: December 2014
by Team of Thomas White International,
International equity prices corrected during the month as fears about the negative economic and political fallout of the steep drop in oil prices on energy producing countries unnerved investors. Brent crude oil prices fell to a six-year low during the month, a decline of more than 50 percent in four months.
Emerging Europe: Economy Trends Update -- January 2015
by Team of Thomas White International,
Emerging European economies witnessed renewed volatility as the New Year unfolded. Russia, the largest of the economies covered in this review, appeared particularly vulnerable as President Putin has not yielded his stance on Ukraine despite the damage inflicted to his country by the Western sanctions and plunging oil prices.
Is That Leveraged ETF Worth It? Comparing SSO and VOO
by Team of GaveKal Capital,
As ETFs control a larger number of assets under management, it is no surprise that the options available to investors are getting ever more exotic. One of the early examples (and thus we actually have history available) of exotic ETFs are leveraged ETFs. Leveraged ETFs attempt to to mimic the daily change in an index, in today's case the S&P 500, by a defined multiple (i.e. 2x, 3x, etc). Today, we will look at one of the more highly used leveraged ETF: Proshares Ultra S&P 500 (ticker: SSO).
Wide Disparity in 2014 Stock Returns Shows the Importance of Diversification
by Team of Bronfman E.L. Rothschild,
With another calendar year in the books, investors can look back to 2014 and see the vast disparity between asset classes, with the U.S. markets leading the way for a second consecutive year. Why not just invest in the S&P 500 Index? The answer is that we don’t know which asset class will be the top performer from year to year. Looking back on the past 15 years, the U.S. has only led three times, with all three coming since 2011, hence the reason for the initial question.
47% of the MSCI World Index Is In A Correction (At Least)
by Team of GaveKal Capital,
Regular readers know we like to slice the market internal data in a many different ways because a lot of the time the cap-weighted indices aren't a proper representation of what is going on with the majority of stocks. With this in mind, one of the ways we like to measure what is going on underneath the surface is to take a percentage of stocks that are trading at levels less than 10% off its 200-day high, 10-20% off its 200-day high, 20-30% off its 200-day high and greater than 30% off its 200-day high.
Positive Economic Surprises in Europe, Negative in the U.S.
by Team of GaveKal Capital,
The Citi Economic Surprise index is a quick way to get a high-level look at the condition of economic data around the world. Calculated as a diffusion index, values generally range between 100 and -100 for the overall index, which is currently right in the middle of that range.
Inflation Expectations Have Increased Since Mid-January
by Team of Knowledge Leaders Capital,
Since January 15th, 5-year TIPS derived breakeven inflation has increased 23 basis points from 105 basis points to 138 basis points. 10-year TIPS derived breakeven inflation has increased 16 basis points during this time and 30-year TIPS derived breakeven inflation has increased 8 basis points since the beginning of February.
Quarterly Letter
by Team of Grey Owl Capital Management,
Over the past seven months the price of oil has plunged from a peak above $100/barrel to the mid-$40s today. This is just the most extreme version of the market volatility and divergence we began highlighting in our second quarter letter. A cautious investment stance remains the prudent choice.
A Contrary Opinion On The US Employment Report
by Team of Knowledge Leaders Capital,
One of the main features of the current recovery is the drop in the potential growth rate. In every other recovery since WW2, real GDP has risen back to potential as the recovery got going, thereby closing the output gap. This time around, the output gap has narrowed because potential GDP has been revised down. This is an important point to understand when looking at today's jobs report.
The Absolute Return Letter - January 2015
by Team of Absolute Return Partners,
In large parts of the financial community there is a strongly held belief that the problems which caused the credit crisis back in 2008-09 have never been properly addressed, causing many to suspect that it is only a matter of time before the ‘end game’ is upon us – the credit crisis Mk. II so to speak. I will in the following pages look at various ways the end game might unfold but, before I do so, I shall return to one of the subjects I discussed in the January letter – the end of cheap oil – which caused a flurry of comments and questions.
Municipal Market Perspectives
by Team of SMC Fixed Income Management,
Pick your poison: weaker oil and copper prices; increasing gold demand; Swiss Franc and Canadian Dollar devaluations; another possible Greek tragedy; launch of European Central Bank (“ECB”) bond buying program; waning emerging markets; weakening U.S. stock prices; global deflation worries. It appears to us that the broadening global weakness could be beginning to negatively impact the U.S. expansion. Given the current state of global events, we see no reason for the Fed to prematurely move ahead with its rate normalization plan as many anticipate occurring by mid-year 2015.
Over Half The Stocks In The MSCI World Index Are Outperforming The Index For The First Time In A Yea
by Team of GaveKal Capital,
For the first time in exactly one year, over half the stocks (51%) in the MSCI World Index are outperforming the headline MSCI World Index over the past 252 trading days (1-year). This is the highest percentage of stocks outperforming in exactly one year.
Reforms in Asia Bring Big Potential for Small Companies
At Templeton Emerging Markets Group, we believe Asia’s combination of rapid economic growth, generally strong national finances and economic fundamentals has created an attractive landscape for equity investors. Seismic changes have been taking place in Asia’s political arena over the past couple of years, including major elections, leadership transitions and even a military coup. These political shifts have economic reform implications as well.
The Strange Case of the Current Small-Cap Cycle
by Team of The Royce Funds,
For much of the past five years, small-cap stocks have generated returns well above their monthly rolling five-year averages. In addition, lower-than-usual volatility within the asset class and a decline in the cost of capital spurred by the Fed?s monetary stimulus programs have created an unfriendly environment for active stock pickers such as ourselves. Our latest research, however, suggests that some of these conditions were abating late in 2014, which might benefit those investors who focus on fundamentals and try to use volatility to create longer-term opportunities.
Is There A Case For German Equities?
by Team of GaveKal Capital,
With the highest productivity in Europe, a sizeable current account surplus and rock bottom interest rates, is there a case to made for German equities? Germany's competitiveness, export performance and trade surplus should increase as the Euro weakens helping German exporters in markets outside of the Euro bloc.
Equity Investment Outlook: More of the Same
by Team of Osterweis Capital Management,
We are of the view that the conditions for further gains in the bull market that began in early 2009 are still intact and that the conditions for a true bear market are not. The market could, of course, be subject to corrections ? it always is ? but we believe the trend is still upward.
Fixed Income Investment Outlook: 2014 is Over. Long Live 2014!
by Team of Osterweis Capital Management,
We believe that at current yields there is no investment grade ?fat pitch? at this time. Our focus remains on keeping duration short and layering-in higher yielding paper, especially on sharp corrections in markets like we have seen recently. We believe that the appropriate time to take a swing at investment grade bonds will be when yields are much higher and the economy is teetering towards recession.
Winter Quarterly Commentary
Last year, Legos hit the big screen. In ?The LEGO Movie?, as those of you with children are more likely to be aware, a Lego mini-figure named Emmet Brickowski and his allies save the universe from the clutches of the evil Lord Business. Victory in hand, our Lego friends then party, to the tune ?Everything is Awesome?. And indeed, here too in our more mundane real world...everything is awesome!
Navigating the Oil Slick
by Team of Calamos Investments,
GDP growth for 2015 is likely to be 2.0%-2.5% globally and 2.5%-3.0% in the U.S. Oil prices may fall further but are likely to stabilize over the next several months. The ECB is likely to ramp up QE in the first quarter. These next months are likely to be volatile, but equities have more room to run. Low corporate borrowing costs and high dividend yields should encourage continued M&A and buyback activity, providing support to equity valuations. With the U.S. in the middle innings of the recovery, the case for secular and cyclical growth companies remains strong.
Global Economic Overview: November 2014
by Team of Thomas White International,
Lower energy prices continued to brighten the global economic growth outlook, though some of the recent data trends have been less cheerful. Crude oil prices have slipped to their lowest level since 2010, and the steep fall has the potential to significantly alter global growth patterns next year.
Emerging Markets Equity Commentary: November 2014
by Team of Thomas White International,
Emerging market equity prices saw a moderate correction during the month as markets in Latin America and Europe slipped. Countries where exports are dominated by energy and commodities saw the worst declines as oil prices continued to tumble.
International Equity Commentary: November 2014
by Team of Thomas White International,
International equity prices saw modest gains during the month of November, helped by hopes of additional quantitative stimulus measures from the European Central Bank (ECB) as well as more robust U.S. economic data.
Pie in the Sky?
by Team of Absolute Return Partners,
January each year brings with it a host of forecasts, many of which are 'pie in the sky' - silly predictions on equity markets, interest rates and currency movements. We are not in that game, but this is the first time we have written a letter in January. Why? Because we think investors should be focusing on longer term structural trends when analysing the future.
Health Care Stocks Pick Up in 2015 Where They Left Off in 2014
by Team of GaveKal Capital,
Across two of the three regions in the MSCI World Index, the health care sector has been the best performer over the last year. In North America, measured in USD, health care stocks are up 29.13% over the last year, while they were up 5.96% in Europe and 2.53% in Asia/Pacific.
Intellectual Property Helps Boost 3Q GDP Growth To Highest Level Since 2003
by Team of GaveKal Capital,
As was widely reported yesterday, 3Q GDP growth was the strongest since 9/30/2003. However, less widely reported was the fact the intellectual property products contributed the most to real GDP in 32 quarters (9/30/2006).
2015 Outlook: Watching Our Overweights
by Team of Northern Trust,
Asset class returns were much more differentiated this year than last, with yield-oriented assets and U.S. equities being the standout performers. We entered 2014 overweight risk tactically, but made several changes as the year progressed.
Municipal Market Perspectives
"Constructive but cautious is our 2015 mantra. Price appreciation has been a major contributor to portfolio performance as evidenced by the yield curve shift from the beginning of the year. 2015 market performance should largely be determined by income, with less support from declining yields.
4 Sectors That May Be Worth Avoiding
by Team of GaveKal Capital,
Success in investing can many times come down to avoiding the major losers rather than always hitting home runs with one's winners. Correct sector allocation plays an important role in sidestepping potential landmines that out there in the market.
Europe Flash PMI Better, Not Fabulous
by Team of GaveKal Capital,
While today's better than expected rise in the flash PMI indicator (black line) for the euro zone is a welcome surprise, it would seem that it will take quite a bit more improvement before we can reasonably expect substantial progress in the recovery of important metrics such as GDP or industrial production.
Why Does Everyone Keep Asking Us About Great Value Buys in Europe?
by Team of GaveKal Capital,
While attending a conference last week and hearing questions and comments such as, "Europe's pretty cheap right now, isn't it?", "Where are you finding the best deals in Europe?", and "I bet you are finding a lot of value in Europe these days", we felt as though it might be appropriate/ necessary to quickly review where European valuations stand at the moment (short answer: the perception that an abundance of relatively inexpensive stocks may be found in Europe is largely misguided).
Results 1,401–1,450
of 2,793 found.
