Every month and quarter, Style Research produces an in-depth series of reports covering key equity factors. On April 11th, 2017, Style Research communicated our Q1 2017 Factor Performance Study via a heavily-attended, live webinar. Read More
SETTING THE MARKET VIEW: A BETTER APPROACH…
In a previous post, we wrote about the challenges of crafting a transparent and objective performance story. Today we focus on setting the Market perspective, often the first step in that process. Recent market performance is the foundation for any portfolio conversation, but setting the right tone and expectation for clients is the key to building a clear and trusted performance story.
As Q1-2017 draws to a close, the investment community is preparing for the upcoming performance review season. During these investment performance reviews, investors are seeking objective and comprehensible stories that ultimately serve to either shake or strengthen their investment manager relationships. However, performance reviews are not solely about measuring performance to the third basis point. Investors are also incorporating context and perspectives about what has happened in various geographic markets and how that led to specific classes or peer groups having outperformed. Performance review season is ultimately about creating, delivering and gaining confidence around a story. It is a complex process and, unfortunately, today there exists a widespread problem.
Every month and quarter, Style Research publishes an in-depth series of reports in our Global Style Perspectives package. This is the summary of the report for February 2017.
Every month and quarter, Style Research publishes an in-depth series of reports in our Global Style Perspectives package. This is the summary of the report for January 2017
Against a background of fast moving political events, equity markets continued their bullish run during January with both the US and UK hitting record highs during the month. Developed markets recorded a 2.4% rise on 2016’s close with Basic Materials and Technology leading the charge. Emerging Markets also fared well, as Oil & Gas rose despite drops elsewhere. A slight weakening of the dollar further inflated international returns for USD based investors. From a Style perspective the world divided into two distinct groups: Value extended its gains in Emerging & Asia (especially China), but reversed in Developed markets.
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Style Research reports strong performance for Value factors in 2016. Financial Times leverages the analysis.
As discussed in John Authers’ article, “Value investing back in fashion amid Great Rotation,” Value factors saw an unprecedented “worst to first” rebound in 2016 after eight years of underperformance. Bernie Nelson of Style Research spoke to John Authers about what drove the Value reversal, how the shift correlates to the “great rotation” away from bonds and why Momentum and Low-Vol investors are happy to put 2016 behind them.
Read the Financial Times article recapping the 2016 analysis.
Value investors finally have something to cheer about.
Their favoured investing style roared back into fashion in recent months after a long, painful period of underperformance. Such shifts in style often persist, so fans of bargain equities may have much more to crow about in the months ahead.
Read The Globe and Mail article, featuring insight from Bernie Nelson of Style Research.
The Great Rotation is back in the news. For the uninitiated, this is the concept that at some point money will flow out of bonds and into stocks as the historic bull market in bonds finally begins to turn. For some, it is only a matter of time; for others, it is a fallacy.
Read the Financial Times article, featuring insight from Style Research.
Veteran value investors such as Hugh Sergeant, Richard Buxton and Richard Oldfield have been basking in the sun over the last six months after choosing to back cheap commodity, cyclical and financial stocks, as investors took the post-Brexit view that global reflation would kick start their earnings.
Read the Financial News article, featuring insight from Style Research.
Which Factors Thrived in 2016?
Our Style Factor Performance Studies dissect Q4-2016 and overall 2016 market performance of the US and EAFE markets into recognizable, sub-style perspectives. The studies offer greater clarity into recent market dynamics and factor performance, and provide support for upcoming individual, quarterly fund performance reviews as well as fund outlook.
Value Strengthening in EAFE and US
After years of struggling, Value came back in both EAFE and the US. But how much did this investment factor recover during the year? Which “types” of Value were the strongest? And how did factors behave in 2016 compared to previous years?
Click the links below to access results and review the full EAFE and US reports.
Factor Performance Reports for Additional Regions
In addition to the US and EAFE Studies, reports are also available for the following regions, showing how style factors behave in various geographies. When clicking either button above to access the studies, use the optional checkboxes to also access any of these regional reports:
- USA Style Performance Report
- Global Style Performance Report
- EAFE Style Performance Report
- Emerging Markets Style Performance Report
- Canada Style Performance Report
- US Small Cap Performance Report
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