Insights

For additional information, please contact us.

Beginning with the January insurrection at the US Capitol and ending with the rapidly spreading Omicron COVID-19 variant, 2021 provided much for markets to digest.  Nonetheless, equity markets continued their rise with support from re-opening economies, strong corporate earnings growth, and stimulative monetary and fiscal policies.  US equities and “growth” stocks continued to lead markets during the fourth quarter, but important transitions are underway that are supportive of a long overdue broadening away from this leadership in markets.

Quarterly Letter

Beginning with the January insurrection at the US Capitol and ending with the rapidly spreading Omicron COVID-19 variant, 2021 provided much for markets to digest.  Nonetheless, equities continued their rise with support from re-opening economies, strong corporate earnings growth, and stimulative monetary and fiscal policies.  This strength continued during the fourth quarter led by US equities (+10.0%) and “growth” stocks, while non-US (+2.7%) and emerging markets (-1.3%) lagged.

Global policy normalization was the key factor driving markets during the fourth quarter.  Responses to inflationary pressures have varied, but many emerging markets have been progressive in raising rates.  While this weighed on the relative performance of emerging market equities versus global equity markets, it may prove to be prescient.  In addition, the more proactive interest rate policies have not gone unnoticed in the currency markets, as the MSCI EM Currency Index remained near its all-time highs.  

Thought Leadership

7 min read | Data breaches are up 280-fold over the past decade, and worldwide underinvestment in cybersecurity and data protection is a massive problem.  A ransomware attack now occurs every 11 seconds.  The cost to control cybercrime has ballooned to 1% of global GDP but related spending still represents just 3.6% of companies’ IT budgets.  This paper by Glenn Cunningham (global technology analyst), presents a case for why data has become one of the world’s hottest commodities and why protecting it has become a hot button topic for corporate and political leaders alike.  

 Altrinsic Global Advisors, LLC today announced the appointment of Scott Ruddick as Strategic Relationship Manager.  As a member of the Global Distribution team, Ruddick will oversee the firm’s consultant relations efforts and focus on developing relationships with institutional investors and advisory partners.

The Altrinsic Emerging Markets Opportunities portfolio declined by 6.9%, outperforming the 8.1% decline of the MSCI Emerging Markets Index, as measured in US dollars.  Positive attribution came from our underweight exposure to China internet and related stocks, our broad overweight in Indian equities, and our differentiated approach to communication services.  Significant volatility within emerging markets, driven particularly by its largest market, China, defined the quarter.

The Altrinsic International Equity portfolio declined 2.2% during the quarter, compared with declines of 0.4% and 3.0% for the MSCI EAFE and MSCI All Country World ex-US indices, respectively, as measured in US dollars.  Strong performance by our financials holdings was offset by weakness among health care, communications, and consumer-related investments that lagged due to uncertainties stemming from COVID-19 and China. 

Quarterly Letter

The Altrinsic Global Equity portfolio declined 0.7% during the quarter, compared with the 0.0% return of the MSCI World Index and the 1.1% decline of the MSCI All Country World Index, as measured in US dollars.  Strong performance by our financials holdings was offset by weakness among health care and communications investments that lagged due to uncertainties stemming from COVID-19 and China.  

12 min read  |  In this paper, we explore the inherent characteristics of the emerging markets (EM) asset class through an economic lens and discuss the key investment criteria that differentiate emerging markets from developed markets. We also challenge the influence of existing benchmarks, which feature significant concentration problems at both the issuer and country level, on investors’ asset allocation decisions and managers’ security selection.

1 min read | Over the past five years, there has been a 90% correlation between growth stocks’ relative performance and long-term bond yields.  Where interest rates go from here is anyone’s guess – but at multiple century lows, the tailwind for growth stocks appears near its end. Click here to view the supporting chart.

 

Pages