Fundametrics® International Small Cap Equity
2Q 2023 Performance Summary and Observations
The Fundametrics International Small Cap Equity strategy returned 0.73% for the quarter, off slightly from the FTSE Developed ex-US Small Cap Index return of 0.78%. The longer-term track record has been successful with annualized alpha of nearly 400 bps since inception.
Central banks’ decisions are driving disparities among regional growth rates and their currencies.
After a decade of underperformance, investors are likely underweight international markets, particularly small caps. This market is inefficient and trades at attractive valuation multiples, presenting potential opportunities for skilled active managers.
Low valuation stocks maintained strong performance while investors showed preference for stocks deemed to have lower levels of risk.
Alpha Composite model results were strong for the quarter. The Buys beat Sell-rated stocks by 170 bps. The Financial Warnings overlay also contributed, screening stocks with excess risks.
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