- 31 DecVector 2021 Annual Review
- 15 OctQ3 Review
- 17 AugChinese crackdowns
- 22 JulVector 2021 Semi-Annual Review
- 25 JunWhy we still like value
- 25 May'Transitory' Inflation
- 22 AprReversal to the mean?
- 17 MarVector's take on sustainable finance
- 09 MarSustainability-related disclosures in the financial services sector (SFDR)
- 19 FebDavid versus Goliath: An analysis of 2020 stock market performance
- 30 DecVector 2020 Annual Review
- 20 NovFactor momentum
- 20 OctHow 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 MayUnprecedented times call for unprecedented measures...
- 23 AprVector's outlook on the Corona Crisis
- 13 MarMarket correction: sense or sentiment?
- 17 FebThe market and sector concentration
- 14 JanNotice to shareholders
- 31 DecVector 2019 Annual Review
- 17 DecFama/French going through its second biggest drawdown since 1963
- 15 NovThe Alpha Lifecycle
- 16 OctVector 2019 Q3 Review
- 10 SepA new prospectus
- 14 AugMarket Review: July
- 10 JulVector 2019 Semi-annual Review
- 14 JunAre factor premia disappearing?
- 21 MayHow persistent is regional outperformance?
- 12 AprMarket recovery: sense or sentiment?
- 12 MarMarkets solidify recovery
- 12 FebStock Markets Rebound
- 31 DecVector 2018 Annual Review
- 14 Dec2019 (outrageous) predictions!
- 20 AugTemperatures and stock markets heat up
- 18 JulVector 2018 Semi-annual Review
- 14 JunDo exporters suffer during trade wars?
- 15 MayStrong earnings put markets on the road to recovery
- 17 AprQ1 Overview
- 13 MarStock Markets: Episode VI: The return of volatility
- 02 MarVector 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!
Vector 2022 Annual Review
31 Dec 2022
Developed market equities had a difficult run in 2022. Rising inflation, the Russian invasion of Ukraine, interest rate increases by central bankers and concerns about growth prospects all contributed to declining equity valuations. As a result, the global equity index was down about 13.0% by the end of the year.
Reversal was an important theme in 2022, being especially tough on the champions of the pandemic: while sectors like communication services, consumer discretionary and information technology all lost more than a quarter of their value over the year, long term laggards like the energy sector – recording a return of 41.8% last year - made a significant comeback. Quant investors who tend to shy away from sectors with bloated valuations were finally rewarded for being underweight in the global titans whose reality check had been long overdue.
Consequently, after a long period of underperformance, factor investing took off again last year with most factors performing quite well. While Momentum and Small Caps performed on par with the benchmark, Value stocks (-1.5%) as well as Low Volatility shares (-0.7%) had an exceptional year after being trashed during the pandemic. Our selection has surely had a tailwind of being tilted towards value stocks at the start of 2022. Since then, however, we have divested about 16% of the value stocks; replacing the holdings with core (6%), but especially growth stocks (+10%), whose valuations now start to make sense again from a quantitative rather than a euphoric point of view.
Vector Navigator recorded a loss of 7.40% during the year, which is about 6.8% better than the average global equity fund during the year. Vector Flexible nearly managed to end the year on a positive note, recording a loss of just 0.30% during 2022. This result was driven in part by the good selection of the core portfolio and in part by a successful market timing. Having next to no duration exposure helped significantly in 2022: while most competitors suffered enormous losses as interest rates increased, this virtually had no impact on the performance of Vector Flexible. As a result, we outperformed the Morningstar category by 12.1% during the year. We are very happy that the comeback - which we have always said was only a matter of time – did not test your patience any longer and we saw the first signs of a recovery for quant investing.
Werner, Thierry & Nils