News and Research
Markets overcame concerns regarding the U.S. debt ceiling, softening economic data, and rising yields. Inflation moderated across most developed regions, providing relief that policy efforts are working. In an environment of narrow market leadership, growth stocks outperformed.
Most major indices stayed resilient and extended positive returns from the previous quarter. Systemic risks to the global financial system spiked temporarily, but so far, remain contained. We expect markets to remain volatile as the lagged impacts from tight monetary policy emerge.
In this paper, we review how our January 2022 view has played out – where we were on target, where we fell short, where the verdict is still out, and why we believe there’s never been a better time for an international core equities manager, such as ourselves.
Early indications show that global inflation eased due to tighter financial conditions. Commodities reversed early year gains, supporting the fading inflation narrative. Value stocks extended their outperformance over growth stocks.
In this paper, we share thoughts on SGA’s strategies and approach, and why we are more excited today than at any time in recent memory. Our conclusion is that if one believes the type of companies our process identifies makes sense – higher quality, consistent growers trading at relatively attractive valuations – we believe there has rarely been a time where the cost of owning such characteristics is more attractive than today.
Global stocks declined on increasing concerns of a more severe global economic downturn. The global growth outlook was revised lower with Europe particularly vulnerable. Market volatility has increased but also creates new opportunities to deploy capital.
Global stocks declined in the second quarter as the macroeconomic outlook worsened. Renewed lockdowns emerged in China while the Russia-Ukraine conflict continued unabated. The World Bank revised downward its 2022 global growth forecasts from 4.1% to 2.9%.
Following three years of double-digit returns, global equity markets declined in the first quarter as market volatility and geopolitical risks increased. Policy makers must now balance combating inflation with maintaining positive economic momentum and global economic growth estimates have started to shift lower.
Global equity markets delivered a third consecutive year of double digit returns in 2021. The OECD expects global GDP growth to moderate to 4.5% in 2022 which is still above long term trends. SGA sees many opportunities in equities today but anticipates volatility into 2022.
The New Year is a time to reset, examine the past and, more importantly, to assess the future with a clear mind and a blank sheet of paper. In this paper we look beyond SGA’s own investment strategies to set a broader stage for thinking about the best way forward in 2022 and beyond.