Equities

Quantitative Investments is beginning a series of monthly videos, each with an update on both systematic and hybrid aspects of investment approaches. Watch the latest updates.

Navigating challenging markets requires assessing earnings and revenue trends and digging into balance sheets. But financial metrics alone can be backward looking. A fundamental understanding of industries, companies, and markets can provide important insights that can help avoid hidden risks and identify overlooked growth drivers.

By the end of this historical election year, nearly half of the world’s population is expected to have gone to the polls to vote for their respective leaders. In the world’s biggest economy, the race has yet to be decided. What might a second Donald Trump term mean for net zero if he were to be re-elected?

In this three-article series, we revisit covered call strategies. In this third article, we give a glimpse into our investment capabilities and provide readers with details on how to potentially capitalize on the opportunity.

Previously considered a niche strategy, quality investing is popular today for a simple reason – it has worked. While there are many nuances in defining a quality company, we focus on five convictions that we believe separate us from other managers.

In this three-article series, we revisit covered call strategies. In this second article, we argue why covered calls offer a compelling way to play equities in the new decade (the “Why”).

How will the upcoming U.S. election affect global markets? The latest Quanta Bytes by Quantitative Investments analyzes how US election outcomes influence equity markets, the link between candidate policies and investment performance, as well as our unique election prediction model.

Former journalists are a key part of the Quality Growth approach. Their unique skill set brings fresh perspective and sparks healthy debate during the research process. This has been shown to help identify trends ahead of the market, avoid potentially costly investment mistakes, and test new and existing investment rationales.

In this three-article series, we revisit covered call strategies. In this first article, we introduce the basic workings – the “what” – of covered calls.

Child labor and imposing unnecessary medical procedures on women were recently identified in the sugar industry in India. While multinationals such as Pepsi and Coca-Cola are not directly linked to poor labor conditions, they can affect change. As active investors, we engage with our portfolio companies on these important issues.

Is ESG simply a different label for quality or could quality stand as a less controversial and politically sensitive description of highly sustainable companies? The question of whether ESG characteristics of listed companies form a new independent factor and a distinctive source of returns is an important one to address.

A company’s competitive advantages are referred to as its moat. Far from castles and the countryside, it is important to analyze the strength and durability of a company’s moat before investing. Since moats can be wide or narrow and change over time, competitive advantages must be constantly monitored.

Many US investors are overweight domestic versus international strategies for the wrong reasons – home bias and benchmark anchoring. In our view, investors should focus on great companies, regardless of where they are domiciled. An active international strategy can help US investors expand their opportunity set, diversify risks, and improve their portfolio returns.

Adding women to corporate boards can improve the impact a board has on company performance. Yet progress has been slow. Companies that recruit former CFOs and CEOs simply cannot find enough female board members. Expanding talent pools can bring more women into the fold.

We believe answers to critical questions about weight loss drugs will help determine the sustainability of success that some pharmaceutical stocks have enjoyed: How many people will be on the drug, and at what price? Which pharma company will be the winner of the R&D race?

Over time the definition of quality has broadened and become subject to a variety of interpretations, with sometimes significant divergence in the performance of quality strategies depending on market conditions.

Is a company that sells a $300 t-shirt a better investment than one that sells a $10 t-shirt? The answer lies in the strength of a company’s brand and, in turn, its pricing power. Or course, profit margins are an important consideration.

David Souccar, portfolio manager and senior research analyst, explains why, in the quest for quality, your portfolio shopping basket would be incomplete without a trip to the international aisle.

Are stock markets poised for a good year in 2024? Jean-Louis Nakamura, head of the Convictions Equities Boutique takes a comprehensive look at the various factors that indicate it may well be.

Welcome to this year’s first edition of mtx perspectives, which will highlight interesting developments across the world of global emerging markets. We start with a look at the digital revolution in Latin America.

Portfolio Manager David Souccar identifies three types of quality companies: Leaders have a rare combination of high returns and high predictability, Defenders grow slower but can protect in down markets, and Opportunity seekers can profit in uncertainty but are less predictable. Like a high-performing team, a successful quality portfolio has the optimal combination of all types of players.

As the landscape shifts, investors may now be exposed to risks that were previously disguised by a prolonged era of accommodative monetary policy. Today, it pays to be wary. A focus on quality can protect in a downturn and provide a smoother ride through the cycle.

Legendary investor Charlie Munger, who recently passed away, followed a simple philosophy of “soldiering on” – persevering through challenging times while also knowing when to seize opportunities. Munger’s wisdom guides us as we manage key risks and seek to find opportunities in 2024.

For the world to meet net-zero targets, massive energy transition capital is required. Governments can’t fund this alone. Asset allocators have a role to play and impact investing will be key.