Quarterly Letter
International equity markets delivered strong gains during the fourth quarter with the Altrinsic International Equity portfolio and the MSCI EAFE Index returning 15.4% and 16.0%, respectively, 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 amounts of fiscal and monetary stimulus that are aiding the general economy and inflating financial assets. As economic data continues to rebound from the dramatic collapse in 2020, financial markets will have to grapple with how much future economic growth has been brought forward, how the burden of all of this debt will be borne, and other long-term consequences – with inflation expectations being a key barometer.
