PSN Top Guns Q4 2015 - Federal Reserve Finally Makes a Move

by Ryan Nauman of Informa Investment Solutions, 3/14/16

After a less-than-stellar third quarter, U.S. stocks had a nice rebound in the fourth quarter to close out 2015. The broad U.S. equity market, measured by the Russell 3000 index, finished the fourth quarter with a 6.27% gain. In October, strong domestic macroeconomic data and continued low interest rates fueled performance. Momentum slowed by the end of the quarter as the Federal Reserve finally increased interest rates to 0.25% and oil hit an eleven-year low.

Global equity markets also started the quarter strong amid signals of continued monetary policy easing, but momentum slowed in December as the European Central Bank’s policy announcement left markets wanting more (MSCI EAFE index +4.75% for the quarter).

Large caps led the rebound in domestic equities, while growth companies outperformed value companies. Large cap growth companies, represented by the Russell 1000 Growth index, finished the quarter up 7.32%. On the other side of the style spectrum, large value companies, measured by the Russell 1000 Value index, came in at +5.64%. Below are some of the managers that make up the All Cap PSN Top Guns.

  • MFS Invt Mgmt: Technology Equity (+10.7% for the quarter)
  • Managed Asset: MAP US Multi-Cap (+9.6% for the quarter)
  • Fred Alger Mgmt: Alger Spectra (+8.8% for the quarter)

Japanese equities also enjoyed a strong fourth quarter (MSCI Japan Index +9.38%), aided by Prime Minister Abe’s statements regarding a stimulus plan intended to boost the economy and end years of deflation. The following strategies made the PSN Top Guns list for the Japan Universe.

  • Sompo Japan Nipponkoa Asset Mngt: Japan Value Equity Concentrated (+13.2% for the quarter)
  • Baillie Gifford: Japan Growth (+10.9% for the quarter)
  • Daiwa SB Invsts. : Japan Eq. Mid-Small GARP (+10.8% for the quarter)

Domestic bond markets trended lower during the quarter as the Federal Reserve raised interest rates for the first time in nearly a decade. Concerns over high-yield bonds resulted in increased outflows from corporate bond funds, which lead to some funds halting redemptions. Oil weakness weighed heavily on energy-related issuers, many of which are below investment-grade credit quality. The BofA Merrill Lynch US High Yield Index ended the quarter with a -2.17% return. The following strategies made the PSN Top Guns list for the High Yield Universe.

  • Bradford Marzec: High Yield (+0.6% for the quarter)
  • Columbia Mgmt: High Yield Fixed (+0.3% for the quarter)
  • Post Advisory: Trad High Yield (+0.2% for the quarter)

(c) Informa Investment Solutions

 

 

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