CHINESE TALL POPPIES: TOO BIG NOT TO FAIL?
As tall poppies get brought down to earth in China, we note this is not a new phenomenon. The selloff in Chinese Tech is part of a long run pattern that poses serious questions for the use of traditional stock selection and portfolio construction tools in China: 1) market cap indices 2) old-style risk management […]
EMERGING MARKETS EQUITIES: WHEN INCREASED ACTIVE SHARE DESTROYS VALUE
“Low active share all but ensures low outperformance” but the increase in active share we have seen in the Global Emerging Markets All Cap Equity peer group in the past few months (median 76.9%) points to something else… the poor relative return of the ‘Big 4’: the most widely held names in the MSCI EM […]
CONDITIONS IN PLACE SUPPORT VALUE’S CONTINUED OUTPERFORMANCE IN NON-US EQUITIES
– Acute dislocations in Income-oriented Value from 2020 have unwound. – That leaves in place the chronic, long run and extreme undervaluation relative to Growth – We believe this chronic undervaluation will continue to unwind across non-US equities going forward and make the next decade… a decade for Income-oriented Value.
EMERGING MARKETS (EM) IN ASIA CONTINUE TO DOMINATE DIVIDEND RESILIENCE IN 2021…
– Stronger income potential in Indian names as financials, industrials, materials and healthcare stocks reinstate dividends. – Dividend recovery likely in the coming months across EM ex-Asia. – We believe the strong performance of income-oriented Value strategies in EM this year is set to continue. The Rothko Dividend Monitor (RDM) interactively reveals changes in dividend […]
2021’s Cascade of Alpha
In our Q2 newsletter we explore the dramatic lift-off of income-oriented, Value: – Cascade of alpha for Income-oriented Value: We explain what happened, and why, we believe, it will continue. – Winner Takes ‘Sm’all: Small Cap has started to come good again, and we believe this is just the start. – The virus to watch in 2021 […]
The Unprecedented Opportunity in Income-oriented Value Equities
2020’s sell-off in Income-oriented Value was one of the most severe and bizarre dislocations of the Coronavirus crisis, however, this has started to unwind. Performance has been excellent this year, but the real income streams underlying the names we hold still remain deeply undervalued. Check out Rothko’s latest newsletter on the unprecedented opportunity in Income-oriented […]
CHINA – Growth Stocks Set to Fall Further as Bond Yields Continue to Rise?
– US Treasuries appear an ominous leading indicator for Chinese Growth names – Further yield rises probable as ballooning budget deficits and bond issuance exert pressures globally – China’s National Team seems engaged in battle with global bond markets Income-oriented Value looks like the beneficiary as markets continue their rotation. In China, the National Team […]
Emerging Markets (EM) Equities: High Dividend Yield vs Growth
Rising Rates + Normalizing Revenues: We Believe The Case for Income Speaks for Itself… – US Treasury yields likely to continue to rise – EM earnings likely to normalize – Models suggest EM High Dividend Yield is likely to outperform EM Growth in almost all scenarios in the near to medium term – High realized-income […]
EM Growth Teeters, Inflation is Up, The Value and Income Trade is Back
– Rates step up with more to follow as debt fueled stimuli come-to-the-fore. – Growth and Tech names providing limited cash flows suffer. – Income-oriented, Value strategies, such as Rothko, look set to benefit…
EM Equities and the February Rates Shock: The ‘Great Income Reversal’ may be upon us…
– 10 Year Treasury Yield jumped from 1.09% to 1.46% in February 2020. – US Inflation expectations continued to rise. – Income-oriented, lower duration strategies, such as Rothko, look set to benefit…