Equity

Global Equity Income Strategy

The strategy pursues long-term capital appreciation and aims to deliver positive excess returns relative to the Russell 2000 Index® by using a disciplined “active quant” approach that combines systematic quantitative modeling with qualitative validation.

Products offered
  • Separate Account

Competitive advantages

Active approach

The team’s active approach to systematic factor-based investing aims to generate alpha for their clients superior to passive approaches.

Cutting edge but transparent portfolios

Clients benefit from the latest cutting-edge techniques with full transparency into the drivers of risk and return in their portfolios.

Continuous innovation

While founded on decades of research, continuous innovation is core to the team’s fundamental beliefs.

PM perspective

PM Perspective: Global Equity Income

Wai Lee, senior portfolio manager for the Multi-Asset Solutions team, discusses global equity market performance in 2024, the outlook for equity income, and positioning into 2025 and beyond.

Play
00:00
Play
Seek 10 seconds backwards
Seek 10 seconds forward
00:00 / 00:00
Mute
Picture in picture
Fullscreen
Transcript

Wai Lee: For capital growth, first and foremost is the ACWI market factor, up 16.5% at the end of October. The best performing U.S. region was up 21% with 5% contribution from Nvidia alone and more than 9% from Big 6 Tech. The market leadership did open up a bit in Q3 with only two of the Big 6 Tech stocks making it to the top 20 performing stocks, year to date. But in historical context, since the 1990s, all net wealth creation in the U.S. and non-U.S. stock markets came from roughly 2% top-performing stocks. So, diversified portfolios actually got a better chance not to miss the best performers in the right tail. Then, along the style axis, growth outperformed as Leading Economic Indicator recorded consecutive months of decline. while Momentum, Large Cap, and Leverage factors also outperformed. On income, dividends, which accounted for one third of the total stock returns in the longer term, contributed less than 2% to the year-to-date return. While they deliver higher income, it has been challenging for many to match the capital growth of the market index. The MSCI ACWI High Dividend Yield Index returned 11.6%, trailing the ACWI by 5%, but there are some exceptional performers out there. We always take a total portfolio approach to put income and capital growth together in a risk-balanced manner. We draw dividends from most of our diversified holdings with profitability screens and news sentiment analysis through Natural Language Processing to help mitigate the risk of dividend cuts. We continue to collect premium by writing index call options. And with recent strong market returns, we think the upside given up is likely limited. To grow capital, we don't exclude the Big 6 Tech just because they don't pay or they pay little dividends. But unlike the High Dividend Yield Index, which is anti-Momentum, we like stocks that show momentum and sentiment to back up the attractive valuations, quality, and profitability. We don't time the market and keep the market beta close to 1. Having said that, monetary easing has been a tailwind to grow both income and capital. We think slowing or soft-lending global economy can push investors further to reward higher-quality, profitable but inexpensive stocks. So, in summary, we feel good entering 2025 in achieving 6% yield with growth potential.

Composite performance

Average annual returns

Average annual returns

(as of 9/30/2024)
Created with Highcharts 11.4.80%5%10%15%20%25%30%35%
1/1/2013
1M
3M
YTD
1Y
3Y
5Y
10Y
Inception
Composite (Gross)
0.75
3.11
20.03
33.13
10.11
11.85
9.07
10.47
Composite (Net)
0.70
2.97
19.54
32.37
9.43
11.12
8.34
9.73
Benchmark
2.32
6.61
18.66
31.76
8.09
12.19
9.39
10.18

Performance is historical and does not guarantee future results. For more information, please refer to the GIPS composite report found in the documents section.


Calendar year

Calendar year

Created with Highcharts 11.4.8-30%-20%-10%0%10%20%30%
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Composite (Gross)
21.46
-15.74
22.06
5.76
23.36
-9.39
24.58
10.02
-2.53
7.40
Composite (Net)
20.68
-16.30
21.27
5.02
22.51
-10.03
23.72
9.25
-3.20
6.65
Benchmark
22.20
-18.36
18.54
16.25
26.60
-9.41
23.97
7.86
-2.36
4.16

Performance is historical and does not guarantee future results. For more information, please refer to the GIPS composite report found in the documents section.


Our team
Meet the investment team

The team believes company returns are predictable based on quantitative factors. They seek to systematically harvest these factors to generate alpha for their clients.

Key risks

Market risk: Security markets are volatile and may decline significantly in response to adverse issuer, regulatory, political, or economic developments with different sectors of the market and different security types reacting differently to such developments.

Equity securities risk: Equity securities fluctuate in value and price in response to factors specific to the issuer of the security, such as management performance, financial condition, and market demand for the issuer's products or services, as well as factors unrelated to the fundamental condition of the issuer, including general market, economic, and political conditions.

Small-cap securities risk: If a strategy invests in the securities of smaller-capitalization companies, these securities tend to be more volatile and less liquid than those of larger companies.

Foreign securities risk: If a strategy invests in the securities of non-U.S. issuers, these investments may be subject to lower liquidity, greater price volatility, and risks related to adverse political, regulatory, market, or economic developments and may be affected by changes in foreign currency exchange rates.

Investors should know that this strategy deployed may be subject to additional investment risks. For important information about the investment manager, please refer to Form ADV Part 2.

Contact Us

We look forward to helping you with your investment needs