U.S. Federal Reserve Chairman Powell's shift to more accommodative policies and improving confidence surrounding U.S.-China trade negotiations were the primary drivers of strong first-quarter gains for most asset classes. As seen in Chart 1, Q1 performance was an abrupt reversal from the fourth quarter swoon. Global equities, as measured by the MSCI World Index, gained 12.5% as measured in U.S. dollars, led by U.S. equities and, most notably, high-priced "growth" stocks. The Altrinsic Global Equity Composite gained 10.0% during the quarter.
2018 was a challenging environment for all asset classes, but particularly in equities, where negative returns were delivered across nearly all major markets and industries. We outperformed market benchmarks during the fourth quarter and for the full year, as our intrinsic value discipline kept us out of many significant decliners, especially among banks, highly cyclical businesses, and previously high-flying tech stocks.
The Altrinsic Global Equity portfolio delivered a 5.4% return during the third quarter, outperforming the 5.0% gain by the MSCI World Index as measured in U.S. dollars. Strong equity market gains during the quarter masked a challenging environment characterized by a significant divergence in underlying stocks’ performance. The dominance by a small group of high-priced and crowded U.S.
The world is changing fast. The threat of disruption is real and growing with the potential for catastrophic outcomes for companies and industries across the globe. Once formidable barriers to entry are breaking down under the onslaught of new, fast-moving competitors empowered by the changing dynamics of the mobile internet age.
The Altrinsic Global Equity portfolio gained 2.7% during the second quarter. By comparison, both the MSCI World and ACWI indices increased 1.0% as measured in U.S. dollars. Stock-specific factors were the primary sources of outperformance amidst an eventful macro backdrop. During the quarter, British citizens voted to leave the European Union, concerns about the European banking system intensified, Middle East unrest spread to distant lands, and the yields on U.S.
'Imagine being a table to re-writ the genetic kode of any organism including tumans.' This sentence obviously makes no sense. Now imagine these spelling mistakes occurred in your genetic code (genome). Your genome is made up of a four letter alphabet, consists of three billion letters and resides in every one of the cells in your body. It defines who you are. To put this in perspective, the Complete Works of William Shakespeare is based on a 26 letter alphabet and has about six million letters.
A transition appears to be underway. Global equity markets have delivered above-normal returns during the last seven years with low volatility and few lasting setbacks, but we may have entered a new environment characterized by more normal returns albeit with much greater volatility. The first quarter was reflective of this increase in volatility, as a 12% rally in the MSCI World Index during the second half of the quarter tempered anxieties that emerged during the 13% dip in the first half, as measured in local currency terms.
Global equity market returns were relatively flat for the year, measured in local currency, but this result masked the significant dispersion in performance among stock, bond, currency, and commodity markets. These muddling markets appear to be increasingly recognizing fragile underlying fundamentals including lingering global imbalances, eroding confidence in policymakers, a slowing Chinese economy, intensifying geopolitical risks, and the vulnerability of U.S. corporate profit margins.