With a full-scale invasion of Ukraine now underway, we want to share some thoughts about this conflict’s impact on our investment portfolios and the developments we are monitoring.
2 min read | Large-cap growth stocks continued to outperform in 2021, leading the average global stock to underperform the MSCI World Index by 6.9%, the worst figure since 1999 and the fourth year in a row of underperformance. This narrow leadership has hindered active global equity managers, but as we enter 2022, the environment is looking increasingly supportive – particularly for bottom-up, fundamental investors. Check out our article[click to read] to find out why.
Beginning with the January insurrection at the US Capitol and ending with the rapidly spreading Omicron COVID-19 variant, 2021 provided much for markets to digest. Nonetheless, equity markets continued their rise with support from re-opening economies, strong corporate earnings growth, and stimulative monetary and fiscal policies. US equities and “growth” stocks continued to lead markets during the fourth quarter, but important transitions are underway that are supportive of a long overdue broadening away from this leadership in markets.
Beginning with the January insurrection at the US Capitol and ending with the rapidly spreading Omicron COVID-19 variant, 2021 provided much for markets to digest. Nonetheless, equities continued their rise with support from re-opening economies, strong corporate earnings growth, and stimulative monetary and fiscal policies. This strength continued during the fourth quarter led by US equities (+10.0%) and “growth” stocks, while non-US (+2.7%) and emerging markets (-1.3%) lagged.
Global policy normalization was the key factor driving markets during the fourth quarter. Responses to inflationary pressures have varied, but many emerging markets have been progressive in raising rates. While this weighed on the relative performance of emerging market equities versus global equity markets, it may prove to be prescient. In addition, the more proactive interest rate policies have not gone unnoticed in the currency markets, as the MSCI EM Currency Index remained near its all-time highs.
7 min read | Data breaches are up 280-fold over the past decade, and worldwide underinvestment in cybersecurity and data protection is a massive problem. A ransomware attack now occurs every 11 seconds. The cost to control cybercrime has ballooned to 1% of global GDP but related spending still represents just 3.6% of companies’ IT budgets. This paper by Glenn Cunningham (global technology analyst), presents a case for why data has become one of the world’s hottest commodities and why protecting it has become a hot button topic for corporate and political leaders alike.
Altrinsic Global Advisors, LLC today announced the appointment of Scott Ruddick as Strategic Relationship Manager. As a member of the Global Distribution team, Ruddick will oversee the firm’s consultant relations efforts and focus on developing relationships with institutional investors and advisory partners.
The Altrinsic Emerging Markets Opportunities portfolio declined by 6.9%, outperforming the 8.1% decline of the MSCI Emerging Markets Index, as measured in US dollars. Positive attribution came from our underweight exposure to China internet and related stocks, our broad overweight in Indian equities, and our differentiated approach to communication services. Significant volatility within emerging markets, driven particularly by its largest market, China, defined the quarter.
The Altrinsic International Equity portfolio declined 2.2% during the quarter, compared with declines of 0.4% and 3.0% for the MSCI EAFE and MSCI All Country World ex-US indices, respectively, as measured in US dollars. Strong performance by our financials holdings was offset by weakness among health care, communications, and consumer-related investments that lagged due to uncertainties stemming from COVID-19 and China.
The Altrinsic Global Equity portfolio declined 0.7% during the quarter, compared with the 0.0% return of the MSCI World Index and the 1.1% decline of the MSCI All Country World Index, as measured in US dollars. Strong performance by our financials holdings was offset by weakness among health care and communications investments that lagged due to uncertainties stemming from COVID-19 and China.
