Yes, if you control for tech overweights. Quality has historically been quite defensive relative to the broad market. Today, it is sensible to question quality’s defensive characteristics, as the factor is concentrated in tech stocks and has become quite expensive.
October 2018
Because the US economy has entered the late stage of the economic cycle, investors should consider the prospect of a bear market recession, even though one does not seem imminent. We have been evaluating the appeal of different asset classes through a late-cycle lens. In this edition of VantagePoint, we evaluate several potentially defensive equity strategies to see whether they are attractive today.
October 2018
In this report, we briefly highlight five key post-GFC developments and discuss how investors might adapt their portfolios to these changes.
September 2018
No, investors should consider staying the course. Though developments and headlines associated with the United Kingdom’s Article 50 negotiations with the European Union have been and likely will remain fitful, they reflect more the political nature of the process and less the underlying fundamentals of the economy and its listed equities.
August 2018
Yes, but investors should be selective in allocating to credit markets at this point in the cycle, and understand that the overvaluation of many credit assets could make attractive returns hard to come by.
August 2018
Solid fundamentals in most countries should limit the damage. The largest markets are not particularly exposed to the risk of a classic balance-of-payments crisis (like the ones occurring today in a handful of smaller markets, including Turkey and Argentina).
July 2018
Climbing the wall of worries is getting tougher. There is room for markets to progress, but caution is required at this stage in the cycle. Markets must overcome four main forces: monetary policy tightening, US dollar strength, a China growth slowdown, and trade friction.
July 2018
We don’t believe so. US small caps have benefited from cyclical tailwinds this year, including strengthening US growth and their more domestic orientation (helpful as the dollar strengthens and trade frictions increase), with small-cap earnings estimated to grow twice as fast as large-cap earnings in 2018.
July 2018