With the rapid development of single country ETFs, capturing factor alpha at the country level may prove to be an efficient, practical alternative to individual stock selection. In this study, we look at how effectively our internally-developed EM stock selection model can guide country overweights/underweights. Back testing shows that stock-level factor alpha can indeed be captured at the country level.
We are reminded of Ben Graham’s Mr. Market analogy. In his analogy, the stock market is like having a business partner (Mr. Market) who offers to either buy or sell his half of the business to you, based on how the business is doing.
The tax efficiency of the Value factor can be improved by reducing exposure to dividend-yielding stocks. Improving the tax efficiency reduces the performance in Europe and Japan, but not in the US. Reducing turnover can be considered for minimising capital gains and stamp duty taxes.
David was the King of Israel and the writer of many of the Psalms. He spent his formative years as a shepherd and framed his life’s work around the key concepts from his profession. Herds were the primary form of wealth back then, while common stocks are a primary form today.
It’s easy to understand why the return of equity market volatility in the first quarter of 2018 caused some consternation for investors.
The underperformance of Buffett’s Berkshire stock (BRK.A) relative to the S&P 500 over the last 10 years is virtually fully explained by the negative performance of the value factor over that period.
Dr. Craig Callahan of ICON Advisers explores whether it’s time for advisers to consider small-cap stocks in their client portfolio.
Emerging market economies are more vulnerable to the ill effects of ESG issues, but because transparency into such issues in these regions has been lacking, and because investors may have different understanding of risks and opportunities than ESG ratings agencies, integration has been difficult," the white paper says.
The current US equity bull market turned nine years old on March 9, 2018. That’s the second longest run without a correction of 20% on record. It’s natural to wonder if the tide is going to turn.
It has been said that an investor will experience three secular bull markets in their life time. In the first one you will not have enough money to take advantage of it. In the third one you will be too old to take the amount of risk to really take advantage of it.