February 24, 2021
Small cap equities continue to outperform large caps, and for those who want factor-based exposure with a value tilt, there are funds available like the
“Shares of small companies are outpacing their larger counterparts by the widest margin in more than two decades,” a Wall Street Journal article explained. “Behind their rise: confidence among investors that heavy stimulus and coronavirus vaccine deployment will boost the economy.”
“Through Friday, the Russell 2000 index of small companies had climbed 15% and set 10 closing records so far this year, well above the S&P 500’s 4% rise,” the article added. “That is the largest such gap between the two indexes through Feb. 19 since 2000, according to Dow Jones Market Data. Small-cap stocks and the S&P 500 edged lower on Monday.”
February 24, 2021
Our planet has been logging the warmest years on record, and we are increasingly experiencing the adverse effects of climate change. It has been widely recognized that climate change is being triggered by higher levels of greenhouse gases. What can we do about it? In this podcast, Sage CIO Bob Smith and ESG Research Analyst Andy Poreda discuss the importance of reaching “net zero” emissions in an effort to tackle climate change. Listen here.
For Sage’s perspectives piece on the challenges companies face in the race to becoming net zero, click here.
Transcript:
00:00
Bob Smith: Good day. I’m Bob Smith, Chief Investment Officer at Sage Advisory, and I’m joined today by my colleague Andy Poreda, Senior Analyst in our ESG research team. We’re here to talk about the concept of net zero. Many of us have heard the term net zero, but how many investors really understand the meaning and goals that define this concept and how they might relate to their in
What GameStop’s Crazy Ride Can Teach Us About Investing
There’s a saying from Winston Churchill, “Never let a good crisis go to waste”, and while the news around the Reddit message board, r/wallstreetbets, and GameStop may not be a crisis per se, it certainly is something that has turned markets upside down, caused confusion among most main street investors, ravaged some multi-billion hedge funds, rewarded some nimble traders and hurt many others who got in too late (read, WSJ: GameStop Investors Who Bet Big and Lost Big). The GameStop story and situation is extraordinary, and I think it can provide us with some broader lessons that are important to remember when investing in the market.
As a global vaccine rollout continues and the economy starts to exhibit signs of healing, fears of inflation could be ahead. A confluence of factors tamping down bond prices is exactly what the bears would love to see.
“Underpinning the bond-fund pain is the building consensus that price pressures are poised to lurch higher,” a Yahoo! Finance article said. “Covid-19 vaccine rollouts combined with the prospect of further fiscal and monetary stimulus have triggered bets on higher inflation, threatening to erode the value of future returns.”
TMV seeks daily investment results before fees and expenses of 300% of the inverse of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index. TMV invests in swap agreements, futures contracts, short positions, or other financial instruments that provide inverse or short leveraged exposure to the index, which is a market value weighted index that includes publicly issued U.S. Treasury debt securities that have a remaining maturi
Technology stocks, which tend to be more affected by interest rates, sold off earlier as the 10-year Treasury yield crested 1.4% to notch its highest level since February 2020. But some tech ETFs like the
“Volatility along the way is to be expected, and higher rates will continue to drive more risk down into sectors and factors, but … dips in the equity market are meant to be bought in this environment,” Christopher Metli, a quantitative and derivative strategist at Morgan Stanley, said in a note.
Powell Comments Reverberating throughout Market
Despite comments from Federal Reserve Chair Jerome Powell in a congressional hearing Tuesday that inflation was ‘soft’ and that the U.S. economy was “a long way from our employment and inflation goals,” Treasury yields continue to surge.