Quarterly Letter
The Altrinsic International Equity Composite gained 13.8% during the second quarter, as measured in U.S. dollars. By comparison, the MSCI EAFE Index and the MSCI All Country World ex-U.S.Index gained 14.9% and 16.1%, respectively, led by richly valued technology stocks. Measures to reopen economies, increased optimism surrounding a vaccine, and hopes for a V-shaped recovery have been supportive, but the primary driver of the rally in risky assets has been the announcement of extraordinary fiscal and monetary stimulus, amounting to 29% of global GDP (Table 1). As many stock and bond prices have climbed to levels that discount a rapid return to normalcy, the scope for disappointment has increased considering the aftershock of enormous debt burdens, subdued demand, and rising geopolitical risk factors, including U.S. elections. The risk embedded in the portfolio is consistent with prospects for a challenging economic environment.
