Are US Quality Stocks Still Defensive?
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
In Light of Ongoing “Brexit” Uncertainty, Should Investors Reduce Exposure to UK Equities?
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
Are Emerging Markets Equities Vulnerable to a Rising US Dollar?
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
Should Investors Boost Their Exposure to US Small Caps, in Light of Recent Economic Policy and Geopolitical Developments?
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
Will the Addition of Chinese A-shares to MSCI’s Global Indexes Trigger an A-Share Rally?
No, MSCI index inclusion will not trigger a bull market in Chinese A-shares.* Given the very modest initial weights and the lack of clarity on future increases, we doubt that index-driven flows will drive share prices meaningfully higher.
June 2018
Are Inflationary Pressures in the United States Building?
Yes. Inflationary pressures in the United States appear to be building, as positively trending wages, expansionary fiscal policies, and protectionist trade barriers feed into a humming economy.
March 2018
Should US Equity Investors Fret About Rising Yields?
Not in the near term. The current environment of rising, but low, interest rates accompanied by strong earnings growth expectations is supportive for equities.
March 2018
Should Investors Be Concerned that the Number of Listed US Stocks Has Dropped by Half Since 1996?
No. The US public equity market remains the largest and most liquid in the world and continues to offer a robust opportunity set for investors.
February 2018
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