- 31 dec.Vector 2021 Annual Review
- 15 okt.Q3 Review
- 17 aug.Chinese crackdowns
- 22 jul.Vector 2021 Semi-Annual Review
- 25 jun.Why we still like value
- 25 mei'Transitory' Inflation
- 22 apr.Reversal to the mean?
- 17 mrt.Vector's take on sustainable finance
- 09 mrt.Sustainability-related disclosures in the financial services sector (SFDR)
- 19 feb.David versus Goliath: An analysis of 2020 stock market performance
- 30 dec.Vector 2020 Annual Review
- 20 nov.Factor momentum
- 20 okt.How will the US elections influence your portfolio?
- 25 sep.Are better times for quant investing on the horizon?
- 26 aug.Fama/French going through its biggest drawdown since 1963
- 17 jul.Vector 2020 Semi-Annual Review
- 25 jun.A Look At Post-Corona Market Valuations
- 25 meiUnprecedented times call for unprecedented measures...
- 23 apr.Vector's outlook on the Corona Crisis
- 13 mrt.Market correction: sense or sentiment?
- 17 feb.The market and sector concentration
- 14 jan.Notice to shareholders
- 31 dec.Vector 2019 Annual Review
- 17 dec.Fama/French going through its second biggest drawdown since 1963
- 15 nov.The Alpha Lifecycle
- 16 okt.Vector 2019 Q3 Review
- 10 sep.A new prospectus
- 14 aug.Market Review: July
- 10 jul.Vector 2019 Semi-annual Review
- 14 jun.Are factor premia disappearing?
- 21 meiHow persistent is regional outperformance?
- 12 apr.Market recovery: sense or sentiment?
- 12 mrt.Markets solidify recovery
- 12 feb.Stock Markets Rebound
- 31 dec.Vector 2018 Annual Review
- 14 dec.2019 (outrageous) predictions!
- 20 aug.Temperatures and stock markets heat up
- 18 jul.Vector 2018 Semi-annual Review
- 14 jun.Do exporters suffer during trade wars?
- 15 meiStrong earnings put markets on the road to recovery
- 17 apr.Q1 Overview
- 13 mrt.Stock Markets: Episode VI: The return of volatility
- 02 mrt.Vector wins Morningstar Germany and Belgium Awards!
- 22 feb.Vector Flexible wins De Tijd/L'Echo Awards for the third year in a row!
- 16 feb.Navigator wins Morningstar France Award!
15 okt. 2021
Despite a difficult September (-2.4%), developed markets still managed to post small gains over the quarter, bringing the year-to-date result of the MSCI World to 19.3%. The same story cannot be told for emerging market equities, however, where China’s struggle with regulating various sectors and the diffulties surrounding Evergrande dragged down the index by 7.5% over the third quarter. Since the turn of the year Emerging Market equities have been broadly flat. This left its mark on the MSCI All Countries Index, which now lags its developed markets counterpart by about 2% year-to-date.
Our Q3 performance has also been impacted by this development as we tend to be slightly overweight in Chinese equities. Our decision to hold on to these already underperforming stocks has sadly not paid off thus far. Yet, we believe that the default of the Evergrande will not trigger China’s Lehman-moment and believe there is more value in holding on to these positions rather than joining the crowd in the fire sales that have been taking place.
Another point that stood out was the rotation away from value back into growth. From May to August 2021 growth stocks have returned 11.0 %, while value stocks only gained 5.5 %. While the year started of very poorly for growth, this investment style has undeniably made a significant comeback. The overweight allocation of the fund to core and value stocks has therefore been a serious headwind in alpha creation during the past quarter.
Lately, inflationary pressures seem to have tempered and even slightly reversed the situation as the market now expects central banks to increase interest rates in order to offset the inflation – giving rise to a climate that favours value investing. In a world with increasing interest rates, we do expect the style reversal from growth into value stocks, which we saw earlier this year, to continue. This is exactly the climate we have seen in Q1 2021, which was one of the best periods of relative performance of the fund in years, so we are hopeful that this should be a serious tailwind to our performance.
Werner, Thierry & Nils