Quarterly Commentaries

Global Equity Strategy 2Q 2017

07.18.2017

Key Takeaways

 
  • Our Global Equity Strategy outperformed the MSCI All Country World Index in the second quarter of 2017 and for the first half of this year. The headwinds that our strategy faced in the latter part of 2016 continued to reverse, benefiting our high quality growth style.
  • A robust earnings season and healthy economy in the U.S. provided a positive backdrop amid investors’ lingering disappointment and uncertainty regarding the execution of President Trump’s agenda. On the back of strong performance, we have pulled back some of our U.S. exposure over the past 12 months.
  • Investors took notice of the Eurozone recovery this quarter. Positive economic data, improving corporate earnings and reduced political risks contributed to optimistic sentiment. However, we recognize that structural reforms will not happen overnight and remain cautiously optimistic on the region.
  • Emerging markets performed well with returns aided by a weakening U.S. dollar and solid growth. China and Korea were notable drivers of returns. We are finding relatively attractive opportunities in emerging markets (EM) and we have increased our exposure to EM through EM-based companies and by investing more in developed market companies with EM exposures.
  • Our holdings in the Information Technology and Consumer Staples sectors contributed to outperformance. Our lack of exposure to Energy stocks also contributed to relative returns.
  • We seek to invest in well run, predictable businesses with consistent earnings growth. If the markets do not sustain their current performance, our portfolios may be impacted over the short term. However, we expect that the strong underlying fundamentals of our holdings will drive their share prices over the long term. By minimizing drawdowns during weak markets, we seek to generate competitive returns with lower-than-market risk over the full market cycle.

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