Where Are Potential Bright Spots For Value Investors?

Despite the slowdown in global gross domestic product, global value equity portfolio manager Mike Liss believes a recession is unlikely. In this quarter’s outlook video, he shares sectors that provide what he thinks are good risk/reward profiles: medical devices and energy.

Mike Liss
Image source: YouTube Video Screenshot

Where Are Potential Bright Spots For Value Investors?

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Q1 hedge fund letters, conference, scoops etc

Global Economic Risks: Are They Diminishing?

Despite the first quarter market rally, Global & Non-U.S. Equity Portfolio Manager Brent Puff notes slowing global growth. What’s that mean? The pace of corporate profits is under pressure, which means a more difficult backdrop for equities.

Global Growth Equity: The Search for Sustainable Growth

Portfolio Manager Prabha Ram looks forward to “robust growth” in 2019. What guides her investment strategy? Consumer demand, Federal Reserve policy and business fundamentals.

What’s Behind the Latest Market Recovery?

Six months ago, Multi-Asset CIO Rich Weiss said markets had a “split personality” – and its performance continues to support his theory. After a rough second half of 2018, we’ve seen a notable turnaround in 2019. How much longer can it last? That’s the subject of his quarterly outlook video.

Large Growth Companies: Steadfast in Uncertain Times

In the current volatile environment, what is the key to success? Large Growth Portfolio Manager Keith Lee shares his thoughts in our quarterly outlook video.

ETFs: Patience Through Changing Economic Cycles

Going into the second quarter of 2019, Portfolio Manager Rene Casis expects to see new ETF products that are more actively oriented. He also shares guidance on how financial advisors can overcome challenges related to implementation—by thinking about the investor’s outcome and remaining patient.


We think that the market is roughly around fair value but that corporate earnings are going to grow slowly in 2019. And so we think that the market backdrop is okay but we see some really good words and some undervalued areas within energy healthcare and financials.

In terms of growth versus value it’s still a pretty tough slog out there. The first quarter growth really beat value by material and out by about 500 basis points. If you’re talking in terms of the Russell 1000 index. So it’s still kind of tough but that just means there’s better opportunities out there for our for our clients. There’s been several themes that have affected the market in the first quarter. First the trade talks with China if not a slowdown in the growth rate of global GDP the Federal Reserve changed their interest rate policy and then you had the subsequent reduction in rates as a result of the Fed’s change in interest rate policy. Not an economist but it certainly seems like the right thing to do. So we felt that the Fed kept rates too low for too long and they finally started raising them and they raised them enough where it’s really it hasn’t choked off economic activity but it’s made it go a little bit slower. Inflation isn’t picking up it’s staying steady below 2 percent. So they have room to operate there. But you saw a slowdown in autos and you saw a slowdown in housing because interest rates had backed up and so the Fed had to recognize that in the first half of the year you had winds of foreign exchange and China in the first half of 2018. Foreign exchange the U.S. dollar really strengthened and so foreign currencies really weakened. It’s going to take us to get to the back half of the year to get that and once we get there it’s going to help corporate earnings that are based internationally outside outside the U.S. Well that’s that’s a concern. I think that can get better in the second half of the year. China’s economy starts to at least stabilize where it is and they’re able to send a little bit more to Europe. And if Europe is able to start to send some more goods over to China because there’s a little bit of increase in demand I think that’s going to help both economies. I think that’s going to come back here as well you have to remember that corporate America gets roughly 30 percent of its revenues from overseas. And if Europe does a little bit better and China does a little bit better that’s going to help us corporations as well despite the fact that global GDP has definitely slowed down. We don’t think that we’re headed for a recession.

And with the market trading around fair value we think that there are some good risk rewards in certain sectors that should lead the market as it moves along.

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