International Equity

Equity returns were strong in the first quarter, supported by positive economic and corporate earnings revisions that offset the negative impact of rising interest rates.  The Altrinsic International Equity portfolio gained 3.6%, as measured in US dollars, compared with the MSCI EAFE Index’s 3.5%.  The most significant market developments were a continued rotation into cyclical and leveraged equities, a surge in commodity prices (S&P GSCI +14.2%), increased inflation expectations, and negative returns for bonds (FTSE WGBI -3.2%).

International equity markets delivered strong gains during the fourth quarter with the Altrinsic International Equity portfolio and the MSCI EAFE Index returning 15.4% and 16.0%, respectively, as measured in US dollars.  As shown in Charts 1 and 2, the strong narrow leadership by highly priced technology stocks that prevailed during most of the year gave way to a rebound in deep cyclical and lower quality businesses during the fourth quarter as encouraging vaccine developments spurred optimism about a return to normal life and improving economic conditions.  Financial markets continued to b

Equity markets delivered solid gains during the third quarter, propelled by significant upward revisions to corporate earnings prospects, low interest rates, and a US Federal Reserve policy announcement suggesting that interest rates will be kept low for the foreseeable future.  COVID-19 case counts remain elevated and economic conditions generally remain pressured, but recent data has been trending better than consensus expectations.  As stock markets appear to be discounting further economic improvement, they continue to be led by a small group of highly-valued "new economy" stocks that a

The Altrinsic International Equity Composite gained 13.8% during the second quarter, as measured in U.S. dollars. By comparison, the MSCI EAFE Index and the MSCI All Country World ex-U.S.Index gained 14.9% and 16.1%, respectively, led by richly valued technology stocks. Measures to reopen economies, increased optimism surrounding a vaccine, and hopes for a V-shaped recovery have been supportive, but the primary driver of the rally in risky assets has been the announcement of extraordinary fiscal and monetary stimulus, amounting to 29% of global GDP (Table 1).

The first quarter of 2020 was one of the worst on record, and it certainly felt like it.  In a matter of weeks, a virus that likely emerged from a wet market in Wuhan, China, brought the global economy to a halt.  A Saudi-Russian induced oil price war exacerbated the decline.  Only cash, select government bonds, and gold provided refuge from the carnage.  There is tremendous uncertainty in the near term, as policymakers inject wartime stimulus into economies, creating a bridge until health risks subside and economic activity recovers.  Opportunities are emerging amid the associated uncertai

2019 was an extraordinary year for most asset classes, and global equities in particular, with the MSCI World Index delivering its third best gain in the past 30 years.  Markets climbed a wall of worry, receiving a boost from the January reversal of central bank policy coupled with an easing of two significant risk factors faced at the beginning of the year:  Sino-US trade tensions and Brexit.  International equities delivered solid returns but were outpaced by US equities and highly priced technology stocks, which led the advance.  Unlike the poor market sentiment entering 2019, current bu

The Altrinsic International Equity composite gained 1.0% during the third quarter, outperforming declines of 1.1% and 1.8% by the MSCI EAFE and ACWI ex-US indices, respectively, as measured in US dollars.  International markets actually delivered positive returns, as measured in local currencies, but weakness in non-US currencies versus the US dollar more than offset underlying gains.  Dovish central banks and subdued inflation provided a supportive backdrop for equities, but the weight of tepid growth in profits, weakening economic indicators, high debt levels, and escalating geopolitical

Global stock markets delivered robust gains thus far in 2019, outperforming all other asset classes.  This strength continued during the second quarter as dovish central bank commentary outweighed the preponderance of weak economic data and tariff fatigue.  Key developments during the second quarter included aggressive declines in bond yields, continued yield curve inversion in major markets, rallying equity markets led by US stocks, "growth" continuing to outperform "value," disparate performance among commodities, and reduced pricing of risk as indicated by narrowing CDS spreads in most c

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.  Non-U.S.

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.