Fundametrics® International Small Cap Equity
1Q 2023 Performance Summary and Observations
The Fundametrics International Small Cap Equity strategy returned 7.47% for the quarter, leading the FTSE Developed ex-US Small Cap Index return of 6.73%.
International developed markets picked up where they left off last year as investors drove prices higher in the face of old and new challenges during the first quarter.
With recent relative strength, attractive relative valuations and weaker-than-normal currencies, international markets should be a talking point. After a decade of underperformance, allocators are likely underweight international markets, especially small caps.
The winning factor profile bounced around during the quarter, but the one constant was low valuation—a staple of the strategy.
Alpha Composite model results were strong for the quarter. The Buys (6.93%) beat Sell-rated stocks (+5.13%). The Financial Warnings overlay results were mixed. Buy candidates that passed all screens, or Safe, were even with Avoid-rated stocks, but those that failed underperformed.
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