Even after a fi ve year run up in the U.S. equity markets, many investors still have ample memories of the fi nancial crisis of 2008. Investors are uncertain of where to invest that will offer some protection against market volatility and also mitigate drawdown risk. As a result, “liquid alternatives” have seen tremendous asset fl ows. According to Morningstar 1 , investors shifted more than $40 billion of assets to liquid alternative mutual funds over the course of 2013, a 43.9% increase from the prior year.
Nearly five years after the panic of March 2009, when stock prices dropped to the lowest levels in recent history, the U.S. equity markets have returned to the range of fair value. At around 1,800 the S&P 500 Index is trading at about 16.5 times estimated 2013 earnings, priced for a fair rate of return in the long run of between 7 and 9% - in line with historical averages. As such, the equity markets look neither cheap nor overvalued. This poses a quandary for those investors – institutional as well as retail – who missed the massive rally off that 2009 low (the “Fat Pitch,” to use a baseball analogy) and with it a whole generation of investment gains. “If we buy U.S. equities now, are we setting ourselves up to buy at the top?” they may be asking themselves. “And if we don’t get in, will we miss yet another Fat Pitch?”
Few managers can claim to have a true competitive advantage; the RWPG Micro Cap team is the exception. Led by Richard Shuster and Greg Weiss, the team immerses itself in finding, analyzing, and meeting with over 600 companies each year. They cultivate these relationships with company management, often over the course of years, in order to fully understand their business strategy, the strength of leadership, and the company’s products, markets and customers. Richard shares his insight below.
Steve Pollack, the Portfolio Manager of the Robeco Boston Partners Mid Cap Value Equity Strategy for more than a decade, explains what makes mid-sized companies with market caps between $1 and $20 billion attractive and how he chooses the winners. Steve shares his insight below.
Executive Summary: Small and micro cap stocks – securities with a market capitalization below $3 billion - offer investors a number of sustainable advantages when compared to other market cap segments. Consequently, they allow active asset managers focused on these stocks the potential to outperform over long periods of time. This is especially true of micro caps, which are typically valued at less than $1 billion.
Executive Summary: A common approach to diversifying a U.S. equity allocation is to supplement a core of large-capitalization equity investments with an allocation to small-capitalization stocks. While simple to execute and intuitively attractive, such an approach overlooks the significant opportunities available in U.S. mid cap stocks.
Jay Feeney and Mark Donovan, Co-Chief Executive Officers: As life-long believers that the best means of achieving superior long-run investment returns is through “bottom-up” research on a stock by stock basis, we rarely contribute to the deluge of “Market Outlook” pieces that seem to proliferate in our industry. But given the full-blown obsession with the U.S. fiscal situation that has developed in the financial media (which feels eerily reminiscent of the Y2K hysteria of 13 years ago), we believe it is appropriate to pass along a few observations that highlight some of the more positive underpinnings of the equity market as it moves into 2013.
Boston Partners Associate Portfolio Manager and Equity Analyst Joshua Jones authored a feature article in WealthManagement.com that explores the structural challenges facing European banking stocks, which, […]
Boston Partners equity portfolio manager Christopher Hart provided commentary to Pensions & Investments through a contributed article that was published in the second week of February. The Article, “Europe Ripe for Active Strategies,” explored the appealing opportunity set that is developing for value-focused investors in the UK and Continental Europe.
In early February, Barron’s profiled Boston Partners Portfolio Manager Duilio Ramallo and the Boston Partners All-Cap Value Fund. The article, “Steering Clear of the Bumps,” highlighted how Duilio and the investment team apply Boston Partners’ three-circle approach — seeking cheap stocks, solid fundamentals and positive business momentum — to provide an analytical edge while avoiding value traps.
BOSTON-‐-‐(BUSINESS WIRE)-‐-‐Boston Partners, a premier provider of value equity investment products, today announced that Morningstar has named Senior Portfolio Manager Robert Jones, Portfolio Manager Ali Motamed and the investment team of Boston Partners Long/Short Equity (Ticker: BPLSX and BPLEX) as the 2014 U.S. Alternatives Fund Manager of the Year. The honor, presented as part of Morningstar’s 28th annual U.S. Fund Manager of the Year awards, recognizes the fund’s performance in 2014, as well the track record of the investment team in generating long-term risk-adjusted returns and serving as good stewards of shareholder capital.