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Global Equity Performance Exceeds That of High-Quality Bonds

Global equities have returned more to investors than high-quality global bonds in nearly three quarters of the last 30 years. The margin of outperformance during those years has been considerable, averaging 12.5 percentage points. That high historical success rate, along with our view that healthy economic activity will support both positive earnings growth and risk appetite, leads us to expect that equities will yet again outperform high-quality bonds.

December 8, 2021

China A-Shares Outperform Global Equities

China’s equity markets have lagged global equities sharply thus far in 2021 in the face of a regulatory crackdown. We expect Chinese equities, particularly China onshore A-shares, to outperform global equities in 2022.

December 8, 2021

Don’t Expect EM ex China Performance to Impress

Emerging markets ex China equities have underperformed their DM peers this year due, in part, to greater economic and political challenges, which have weighed on sentiment toward the bloc. We expect these issues to persist into next year and are skeptical that EM ex China equities can outperform DM equivalents.

December 8, 2021

Active Equity Manager Performance Benefits as Breadth Widens

A market environment with a wider breadth of winners and losers provides greater opportunity for skilled active managers to distinguish themselves. Given the more balanced earnings contribution across sectors relative to 2020–21 and the widely dispersed equity valuations, we expect the breadth of winners and losers will be wider in 2022.

December 8, 2021

Catch My Drift? Active Managers’ Style Tends to Change Over Time

The style bias of actively managed growth and value equity portfolios is not typically static. In this paper, we highlight how the strength of active managers’ style signatures have moved between value and growth and propose a simple fundamental rationale for why this happens.

September 14, 2021

ESG Challenges and Opportunities in Chinese Equities

Investor interest in China has grown over the years as China’s economy expanded and the market opened up to foreign capital. However, environmental, social and governance (ESG) issues remain a key concern for many investors.

September 2, 2021

Can Value Stocks Continue to Outperform the Broad Market?

Yes, we believe value stocks can resume their leadership relative to the broad market over the next six to 12 months, provided we are correct in our assessment that the economic impact of COVID-19 Delta variant will be limited in major developed markets and China.

August 26, 2021

VantagePoint: Can Value Outperformance Endure?

In this edition of VantagePoint, we explore the historical drivers of the value risk premium to determine if there have been any fundamental changes since 2007, the start of the global financial crisis, and to understand conditions that must be present for a sustained period of value outperformance.

July 20, 2021