No, Federal Reserve rate cuts alone are unlikely to trigger sustained outperformance for Chinese equities. While the start of Fed rate cuts may help support the RMB and allow the People’s Bank of China (PBOC) to modestly ease monetary policy, it is unlikely to reaccelerate China’s economy and ease current deflationary pressures, both of which […]
August 2024
Yes. Emerging markets (EM) equities provide a fitting reminder that relative performance among asset classes varies over time, suggesting that investors maintain well-diversified portfolios to weather shifts in performance cycles. Neither the widespread underperformance of EM equities since the Global Financial Crisis (GFC)—nor a sustained period of EM outperformance—are without precedent. We are neutral on […]
August 2024
No, not right now. We continue to believe investors should: (1) keep equity allocations aligned with broad policy targets; (2) maintain modest overweights in less expensive areas within equities, such as developed markets value and small caps; and (3) maintain a modest overweight in long US Treasury securities within bond portfolios. The potential for continued […]
August 2024
The Labour Party secured a sweeping victory in the UK general election, returning them to power for the first time since 2010. Although Labour’s share of the vote increased only slightly since 2019 to 34%, the Conservative’s loss of votes to Reform allowed Labour to win 412 of the country’s 650-seat parliament. Even so, we […]
July 2024
Yes, we believe it will. Excitement around artificial intelligence (AI) and its related technological advancements has been a key market driver since early 2023. Investors are rightly enthusiastic about the potential for AI to support labor productivity and growth. We share this enthusiasm, while acknowledging the uncertainty in quantifying these benefits. Despite AI’s long-run promise, […]
June 2024
No. The Japanese yen has been on a weakening trend for several years. For most of that time, it has been a lynchpin of Japanese equity outperformance in local currency terms. We believe there is limited further downside for the yen, which, while removing a headwind for USD returns, also removes the main pillar of […]
May 2024
While there has been much debate around whether active managers can outperform passive indexes overall, a more relevant question is whether investors should pursue active management in public, long-only equities at all. Despite the challenges, we believe active management, especially in less efficient markets, can be worthwhile if investors: 1) employ a rigorous manager research […]
May 2024
Yes. We believe higher-quality US small-cap companies trade at a significant discount to large-cap peers, and their balance sheets have held up better than headlines suggest. Recent earnings for small-cap companies have disappointed, but we see this as more driven by sector and cyclical effects that should ease over the next 12 to 18 months […]
May 2024