Global Equity

Stock-based compensation (SBC) in the technology sector has proliferated in recent years, driven by the war for talent and a period marked by low cost of capital, plentiful access to capital, and rising valuations. The challenge comes when decade-long market tailwinds begin to change direction. The virtuous cycle of aggressive stock issuance to employees, elevated ‘adjusted’ earnings, rising stock prices, and strong employee engagement can become vicious when it unwinds.

Quarterly Letter

The Altrinsic Global Equity portfolio declined 0.1% during the first quarter, outperforming the MSCI World Index’s 5.2% decline, as measured in US dollars.   Just as most nations began lifting COVID-related restrictions and returning to normal, tensions intensified amidst surging inflationary pressures, tightening policy measures in the US,  lockdowns in China, and Russia's invasion of Ukraine.  

 

 

Thought Leadership

3 min read | Hypersonic weaponry is one of the most disruptive technologies in modern defense. We recognize that this is a controversial, sensitive, and potentially polarizing topic for multiple reasons, especially given the ongoing war in Ukraine. Yet, given the significant resources governments are committing to hypersonic research and innovation, we felt it would be valuable to provide a brief, fact-based review of hypersonic technology, its history, and the potential implications from both geopolitical and industry standpoints. Our sole intent is to provide an educational overview.

Quarterly Letter

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.

Thought Leadership

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.  

Quarterly Letter

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.  

Thought Leadership

This interview with two of our research analysts, Rich McCormick (global financials) and Glenn Cunningham (global technology), dives into the underappreciated risk of disruption to traditional banking businesses.  Fintech firms have banks' profitable consumer and small business segments in the cross-hairs.  Meanwhile, investors have largely been bullish on banks since the November 2020 COVID-19 vaccine announcement.  We question how much value is left to unleash and believe the risks of disruption could take center stage.

Quarterly Letter

Equity markets delivered strong gains in the second quarter, aided by continued policy stimulus, robust economic and corporate earnings growth, positive sentiment stemming from fewer global COVID-19 cases, and a supportive interest rate environment.  Large cap “new economy” stocks led the markets in Q2 given the supportive interest rate environment, while health care stocks advanced on softening political rhetoric and positive new drug discoveries.  

Equity returns were strong in the first quarter, supported by positive economic and corporate earnings revisions that offset the negative impact of rising interest rates.  The Altrinsic Global Equity portfolio gained 6.1%, as measured in US dollars, compared with the MSCI World Index’s 4.9%.  The most significant market developments were a continued rotation into cyclical and leveraged equities, a surge in commodity prices (S&P GSCI +14.2%), increased inflation expectations, and negative returns for bonds (FTSE WGBI -3.2%).

Quarterly Letter

Global equity markets delivered strong gains during the fourth quarter with the Altrinsic Global Equity portfolio and the MSCI World Index both returning 14.0%, as measured in US dollars. As shown in Charts 1 and 2, the strong narrow leadership by highly priced technology stocks that prevailed during most of the year gave way to a rebound in deep cyclical and lower quality businesses during the fourth quarter as encouraging vaccine developments spurred optimism about a return to normal life and improving economic conditions.  Financial markets continued to be bolstered by unprecedented amou

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