Displaying items by tag: outperformance
In an interview with Russ Alan Prince in Financial Advisor Magazine, Jeffrey Schwaber, Chief Executive Officer of Bluerock Capital Markets, stated that he believes real estate is well-positioned to outperform in 2023. He noted that while some economic indicators are pointing towards a possible recession this year, “real estate market fundamentals remain very healthy.” He referenced the difference in real estate during the Financial Crisis and now. For instance, the three key factors that negatively impacted real estate during the financial crisis, supply, leverage, and jobs, are all now healthy. Real estate supply as a percentage of total inventory is the lowest it has been in the "trailing 10-year period compared to previous periods and is forecasted to remain at lower levels." The use of leverage since the Financial Crisis has been the lowest of any “real estate/economic recovery” in the last forty years. As for jobs, the unemployment rate was 3.7% as of November, close to the lowest level in 10 years. In terms of where to invest, Schwaber is bullish on the industrial, life science, and single-family residential sectors. The growth of online retail is driving demand for warehouse and distribution centers on the industrial side. Life science real estate offers an attractive opportunity due to significant growth in biotech research, and the significant undersupply of apartments and single-family rentals is fueling the residential housing market.
Finsum:Due to healthy fundamentals, Jeffrey Schwaber, Chief Executive Officer of Bluerock Capital Markets, believes real estate will outperform this year in the industrial, life science, and single-family residential sectors.
While many hedge funds performed poorly last year, there was one strategy that had a big year, macro. According to Investopedia, a global macro hedge fund strategy is defined as a strategy that bases its holdings primarily on the overall economic and political views of various countries or their macroeconomic principles. Macro strategies performed well in last year’s volatile market, leading to strong gains for several funds. For instance, AQR Capital Management’s longest-running strategy had its best year since its inception in 1998, with the fund posting a gain of 43.5% net of fees. In fact, at least a dozen AQR funds saw record performance. AQR’s Absolute Return strategy soared 55% before fees, while the Style Premia Alternative Fund jumped 30.6%. AQR’s global macro strategy also had its best year, with a 42% gain. AGR wasn’t alone in having a strong year. Scott Bessent, who is a former Soros Fund Management investing chief, posted a 30% gain in his macro hedge fund and Chris Rokos’s $15.5 billion Macro Fund surged 51% in 2022, his best-ever gain. However, there was one notable firm that didn't perform well, Bridgewater Associates. Ray Dalio’s firm gave up much of its gains after losing money in October and November.
Finsum: Several macro hedge funds performed well last year, with at least twelve AQR funds achieving record performance.
StockSnips, a firm that provides easy access to stock market news sentiment analysis, announced that it has introduced a new SPDR Sector ETF-based portfolio model that ranks sectors by leveraging its proprietary sector sentiment signal. This will be the fifth StockSnips model portfolio that aims to deliver alpha after the launch of equity-based portfolios last year. With model portfolios increasingly attracting assets and markets being impacted by social media, investor sentiment, and chatter, StockSnips believes its signal can quantify those investor sentiment trends, resulting in alpha for end investors. While most sentiment analysis uses a survey methodology, StockSnips separates signals from the noise through Micro-sentiment, focused at the individual firm level. Ravi Koka, CEO of StockSnips commented on the model, "We are excited to bring a sector ETF-based portfolio model to investment advisors and asset managers, leveraging our extensive research in transforming unstructured textual information to a valid signal, and a robust proxy for measuring investor sentiment for a sector.” Their ticker-based portfolio models have performed well so far in a volatile 2022, and they believe the back-testing results for their sector model bode well for investors as well.
Finsum:StockSnips introduced its fifth model portfolio that aims to achieve alpha through its proprietary sector sentiment signal.
Two strategists from Royce Investment Partners believe that now is the right time to consider small-cap stocks. In an article on Wealthmanagement.com, Francis Gannon and Steve Lipper gave six reasons why they believe the current environment is a great time to invest in small-cap stocks. The first reason is that small caps currently have superior valuations compared to large-cap stocks. Another reason to invest in small caps is the fact that small caps have a history of outperformance following periods of high investor anxiety and low-risk tolerance. Small caps have also historically beaten large caps following periods of deep declines. In addition, small caps operate in their own way; meaning there are significant differences between small and large caps in their long-term performance during different market cycles. Gannon and Lipper also mention that small caps are a highly heterogeneous asset class, indicating that there are so many small-cap companies that investors can find stocks in every sector and industry. The sixth and final reason is that investors lose out by waiting to put capital to work. They noted that small-cap recoveries have historically happened very quickly.
Finsum:Two strategists from Royce Investment Partners provide six compelling reasons why investors should consider small-cap stocks now.
As investors grapple with inflation and economic uncertainty, there is one industry that has been outperforming the market, and that’s cybersecurity. While most technology companies have cautioned investors about slower corporate spending, cybersecurity firms are still seeing massive demand. For instance, CrowdStrike and SentinelOne, both recently increased their forecasts for this year. While cybersecurity has always been important, companies are now even more concerned about system vulnerabilities due to an increase in cyber-attacks amidst the war in Ukraine. In addition, the advent of remote and hybrid working arrangements has also increased the demand for cybersecurity solutions. While companies can trim spending on software items such as CRM, cybersecurity is too important to risk. The minute a company lets up, they are at risk of a ransomware attack. This has resulted in the Global X Cybersecurity ETF (BUG) outperforming the NASDAQ this year.
Finsum:While other software companies are seeing slowing demand, the sheer necessity of cybersecurity has resulted incybersecurity ETFs outperforming the NASDAQ this year.