Clear Portfolio Analytics & Communications

Q2 2017 Factor Performance Analysis Webinar – Recap

Tuesday 11th July, 2017

Style Research provides in-depth analysis covering key equity factors on monthly and quarterly bases. On July 11th, 2017, Style Research presented the Q2 2017 Factor Performance analysis via a live webinar attended by hundreds of investment professionals.

Peter Hopkins, COO of Style Research, kicked off the session with a macroeconomic perspective, providing context on current topics: regional political issues, deflationary and inflationary concerns, unemployment and overall sector performance.

Peter initially focused on value factors, given that they had rallied in late 2016 after a previous eight  years of mixed performance, going from “worst to first.” In Q1 2017, however, we saw a reversal of value factors in favor of growth, especially in US and European equities. With value stocks down, we also saw underperformance in high momentum.

KEY TAKEAWAYS OF Q2 FACTOR RESULTS

Q2 2017 delivered somewhat of “the same game” as Q1, with some key differences:

  • Value factors continued their decline, with Cashflow/Price – 2016’s star factor – the worst performer over Q2
  • Quality growth outperformed, though returns to the margin factor were neutral. Short Term Momentum has also started to pick up, which could be an effect of the performance of quality growth.  
  • Size and Beta again had small returns, though this time negative
  • Stability, especially Stability of Sales Growth, performed well

Peter discussed the importance of analyzing the factor returns with country- and sector-neutral portfolios to examine the style factors in isolation of any impact from any particular overweights. He also explored highlights in regional factor performance.

In summary, Q2 2017 results highlight a quality growth first half, though there were signs of a recent resurgence in value in June. With markets continuing to power ahead, overall valuations could become stretched and investors may be content to sit on the sidelines, if not taking profits from recent rallies.

GET THE FULL PICTURE

Get the complete analysis of which specific factors contributed to results in the Style Research Q2 2017 Factor Performance Study. Click here to access the full recording of the webinar and request various regional reports.

Author: Style Research | Categories: Insights, Markets Analysis

Access the Q2 2017 Factor Performance Reports and Webinar recording.

CLICK HERE
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