Insights

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Portfolio Manager Alice Popescu provides a two-minute summary of her Q3 2023 emerging markets investment commentary, including her contrarian perspectives on China.

7 min read | The Altrinsic Emerging Markets Opportunities portfolio declined 2.4% (-2.6% net) compared to the 2.9% decline of the MSCI Emerging Markets Index, as measured in US dollars. Performance throughout the period varied markedly within emerging market, with a stark divergence between EMEA and Latin America. Performance across the market capitalization spectrum also varied, with small and mid-cap EM stocks substantially outperforming the broad EM index. Overall, EM equities outperformed developed markets in the third quarter.

9 min read | The Altrinsic International Equity portfolio declined 2.1% (-2.4% net) during the third quarter, as measured in US dollars, compared with declines of 4.1% and 3.8% for the MSCI EAFE and MSCI All Country World ex-US indices, respectively. Outperformance came amid volatility in stock, bond, currency, and commodity markets, as markets and economies are grappling with an environment transitioning from one flooded with free money to one of rising nominal and real interest rates. This transition, coupled with significant uncertainty around growth, inflation, regulation, technology competition, and government policy, contributes to elevated risk in markets. We believe these factors should support a broadening out in markets with greater attention paid to quality, valuation, and risk.

Quarterly Letter

9 min read | The Altrinsic Global Equity portfolio declined 1.6% (-1.8% net) during the third quarter, as measured in US dollars, compared with declines of 3.5% and 3.4% for the MSCI World and MSCI All Country World indices, respectively. Outperformance came amid volatility in stock, bond, currency, and commodity markets, as markets and economies are grappling with an environment transitioning from one flooded with free money to one of rising nominal and real interest rates. This transition, coupled with significant uncertainty around growth, inflation, regulation, technology competition, and government policy, contributes to elevated risk in markets. We believe these factors should support a broadening out in markets with greater attention paid to quality, valuation, and risk.

5 min read | The valuation case for international equities is among the most compelling we have seen in years, but this is only part of the story. The conventional wisdom is that non-US equities are cheap for good reason and that international stocks are either low-growth or high-risk, but fundamentals are stronger than many investors perceive. In this paper, we discuss the underappreciated case for investing in international markets, built upon several timely and compelling themes.

7 min read | by Robert Silgardo | Earlier this year, I spent a week in Taiwan and met with over 20 companies within the Asian technology supply chain [click here to read more].  Economic activity, day-to-day life, and sentiment among citizens and corporate executives are largely back to normal.  Most COVID restrictions and policies have been lifted, but many locals (especially those in the service industry) still wear masks, and everyone is required to mask up on public transit (including the high-speed rail).  Concerns about a potential Chinese invasion, slower-than-expected demand recovery, and ongoing talent shortages were topics of discussion during many meetings with company executives.

LinkedIn

4 min read | An excellent article in the FT by Richard Bernstein offers great perspective and makes a case for the overdue broadening out of markets [click to read]. We concur and have written extensively on this issue from a different angle. Our CIO John Hock worked with Rich back in his Merrill Lynch days and always admired his character, intelligence, investment acumen, and common sense. Different perspectives, but shared conviction in how this plays out. 

11 min view | This video features a conversation between Sara Sikes (Head of Client Experience) and Alice Popescu (Portfolio Manager on our Emerging Markets Opportunities strategy, which is approaching its three-year track record). The discussion succinctly covers Alice’s philosophy regarding EM investing, her personal and professional journey, opportunities and risks we see in the EM landscape, and insights from recent research trips abroad. Click 'Read more' below to access the video.

3 min read | by Glenn Cunningham | I recently traveled to Spartanburg, SC, one of the primary automotive manufacturing hubs in the United States, with over 500 auto-related companies employing more than 75,000 workers. Meetings with manufacturers, suppliers, and government officials provided insights into key themes shaping the auto industry: technological change, new sources of competition, and supply chain disruptions.

9 min read | The Altrinsic Emerging Markets Opportunities portfolio gained 3.6% (3.3% net) this quarter, outperforming the MSCI Emerging Markets Index's 0.9% return, as measured in US dollars. Performance throughout the period varied markedly across emerging markets, with a particularly stark divergence between Asia and Latin America. China’s post-pandemic recovery has been challenging despite the initial reopening excitement, with underwhelming economic indicators driving significant underperformance. Meanwhile, economic activity in Latin America proved far better than expected, with many upward revisions and strong performing currencies in key markets, including Brazil and Mexico.

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