In 2023, the financial markets demonstrated cautious optimism, navigating ongoing global recovery efforts, the complexities of inflationary pressures, and fast-changing geopolitical dynamics.
Because of this unique investment landscape, staying informed is critical. Our investment teams are dedicated to traveling around the globe to gain a deeper understanding of potential investments. They are also committed to creating insightful thought leadership that delves into unique opportunities.
Below, we highlight some of our most impactful blogs of the year. For even more insights on the economy and investment landscape, subscribe to our blog today.
Will Quality Small and Mid Cap Lead the Charge?
Early in 2023, Rob Lanphier, partner, portfolio specialist on our U.S. growth and core equity team, posed the question, “Will quality small-mid-cap (SMID) lead the charge?”
While there have been many variables that drove the disparity between large and SMID equities this year, the SMID asset class continues to look attractive, as Rob highlights in his latest blog post, “Revisiting Quality U.S. Small and Mid Caps.” In our view, the market pivot from large caps is a question only of “when,” not “if.”
Two Sides to the Story in Emerging Markets Debt
There are always two sides to every story, and the first quarter of 2023 was no exception for emerging markets debt, writes Marco Ruijer, CFA, a portfolio manager on our emerging markets debt team.
On one hand, the asset class suffered from an increase in risk aversion led by concerns about the health of the U.S. banking sector. On the other hand, those concerns should drive the end of the monetary tightening cycle and improve the global macro backdrop, supporting emerging markets debt fundamentals.
Large-Cap Growth: Navigating Index Concentration
Over the past decade, large-cap growth indices have delivered strong returns relative to many asset classes. But as index concentration has risen over this period, the largest issuers have become an increasingly sizable portion of the large-cap growth asset class and have been outsized contributors to index performance.
Our investment teams are committed to creating insightful thought leadership that delves into unique opportunities.
As a result of the growing market concentration, the majority of passive funds have also become top-heavy as their exposure to the largest index constituents moves in lockstep, explains Aaron Socker, a portfolio specialist on our U.S. growth and core equity team. Active managers, unlike their passive counterparts, are not anchored to the dominant weights in the index and may be well positioned to navigate an evolving market landscape.
What’s Shaping India? 5 Emerging Trends
To check in on India’s economic growth, members of our global equity team traveled to India in the fall of 2022 and met with public and private companies, industry experts, and venture capital investors. They found that while COVID-19 impacted near-term developments in India, key sectors are standing out, offering compelling investment opportunities.
Jeremy Murden, CAIA, portfolio specialist, Jay Kannan, global research analyst, Michael Patchen, global research analyst, and Ben Loss, global research analyst, discuss five emerging trends to watch, from digitalization and rising consumption to solar energy and urban and rural infrastructure modernization.
A New Era of Investing Dawns
Back in February, Ken McAtamney, partner, portfolio manager, and head of our global equity team, wrote that “we have begun to shift into a different economic and market environment, marking a different era than we have seen in the decade-plus since the Global Financial Crisis (GFC).”
Despite this backdrop, companies that persistently out-earn their cost of capital, grow their asset bases with high returns on invested capital, and innovate to solve customer needs continue to look like potential attractive investments. Recently, Ken expanded on how market leadership is broadening in this different environment.
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