Global equity market returns were relatively flat for the year, measured in local currency, but this result masked the significant dispersion in performance among stock, bond, currency, and commodity markets as illustrated in Figure 1. These muddling markets appear to be increasingly recognizing fragile underlying fundamentals including lingering global imbalances, eroding confidence in policymakers, a slowing Chinese economy, intensifying geopolitical risks, and the vulnerability of U.S. corporate profit margins.
The Altrinsic Global Equity portfolio gained 2.0% during the second quarter, outperforming a 0.3% return by the MSCI World and MSCI All Country World indices as measured in U.S. dollars. Strong mergers and acquisitions activity involving our holdings, efforts to unlock value via prudent capital management (e.g., dividends, buybacks, divestitures), and growing evidence of positive change in Japanese corporate behavior contributed to outperformance during the quarter.
The Altrinsic Global Equity portfolio gained 4.3% during the quarter, outperforming the 2.3% gain by the MSCI World and MSCI All Country World indices as measured in U.S. dollars. Strong absolute and relative performance was led by our Japanese holdings. A combination of company-specific initiatives along with Prime Minister Abe’s aggressive macroeconomic policies boosted profits and share prices.
