- 15 OktQ3 Review
- 17 AugChinese crackdowns
- 22 JulVector 2021 Semi-Annual Review
- 25 JunWhy we still like value
- 25 Mai'Transitory' Inflation
- 22 AprReversal to the mean?
- 17 MärVector's take on sustainable finance
- 09 MärSustainability-related disclosures in the financial services sector (SFDR)
- 19 FebDavid versus Goliath: An analysis of 2020 stock market performance
- 30 DezVector 2020 Annual Review
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- 20 OktHow will the US elections influence your portfolio?
- 25 SepAre better times for quant investing on the horizon?
- 26 AugFama/French going through its biggest drawdown since 1963
- 17 JulVector 2020 Semi-Annual Review
- 25 JunA Look At Post-Corona Market Valuations
- 25 MaiUnprecedented times call for unprecedented measures...
- 23 AprVector's outlook on the Corona Crisis
- 13 MärMarket correction: sense or sentiment?
- 17 FebThe market and sector concentration
- 14 JanNotice to shareholders
- 31 DezVector 2019 Annual Review
- 17 DezFama/French going through its second biggest drawdown since 1963
- 15 NovThe Alpha Lifecycle
- 16 OktVector 2019 Q3 Review
- 10 SepA new prospectus
- 14 AugMarket Review: July
- 10 JulVector 2019 Semi-annual Review
- 14 JunAre factor premia disappearing?
- 21 MaiHow persistent is regional outperformance?
- 12 AprMarket recovery: sense or sentiment?
- 12 MärMarkets solidify recovery
- 12 FebStock Markets Rebound
- 31 DezVector 2018 Annual Review
- 14 Dez2019 (outrageous) predictions!
- 20 AugTemperatures and stock markets heat up
- 18 JulVector 2018 Semi-annual Review
- 14 JunDo exporters suffer during trade wars?
- 15 MaiStrong earnings put markets on the road to recovery
- 17 AprQ1 Overview
- 13 MärStock Markets: Episode VI: The return of volatility
- 02 MärVector wins Morningstar Germany and Belgium Awards!
- 22 FebVector Flexible wins De Tijd/L'Echo Awards for the third year in a row!
- 16 FebNavigator wins Morningstar France Award!
Reversal to the mean?
22 Apr 2021
During the first quarter of 2021 we saw the stock markets post further gains. Since the MSCI All Countries bottomed out last year in march it has rallied substantially (+63%) and now stands 9% above its pre-covid peak. While countries that did well on their vaccine rollout - like the UK and USA - soared the highest, virtually all regions ended the quarter substantially higher. Emerging Markets, which had a great run in 2020, had some difficulties in February and march causing them to lag the developed world a bit.
While rising optimism about global growth drove most markets higher, style-wise we have seen a huge discrepancy in the returns between current and last year. On the one hand, the enormous stimulus cheque signed by the Biden administration and increasing commodity prices boosted those companies that investors had avoided like the plague at the height of the pandemic. On the other hand, the rise in bond yields hurt those sectors whose profits lie far ahead in the future - like technology stocks - the most. As a result, there is a reversal in the performance between sectors.
The shift in momentum from growth to value stocks helped our funds quite a bit. Vector Navigator is up 14.5% year-to-date, outperforming its benchmark index by 5.6% so far. Vector Flexible gained 9.3% during the first quarter, which also compares favourably with its Morningstar category index. The benchmark suffered from rising yields and stands at just 3.7% year-to-date. As Flexible uses future contracts to hedge its equity exposure we were not caught on the wrong side of bond duration - unlike many of our colleagues that use a more traditional approach.
Werner, Thierry and Nils