Fundametrics® Large Cap Equity
4Q 2022 Performance Summary and Observations
- The Fundametrics Large Cap strategy finished the quarter and year with attractive relative returns, beating the Russell 1000 Value Index by 67 bps for the quarter and 207 bps for the year.
- 2022 saw the Fed raise interest rates at one of the fastest clips on record, increasing the probability of pushing the US economy into a recession. Investors spent the year pricing in this risk, with large-cap valuation multiples contracting by 21%, while trying to predict the Fed’s next move. 2023 will start with a lot of the same uncertainties, which historically creates alpha opportunities for disciplined stock pickers like CornerCap.
- The Fundametrics investment process, which emphasizes picking the best stocks within each customized peer group, performed well. The Alpha Composite Buys beat both the overall large cap universe and the sell-rated stocks.
- From a factor perspective, value, after being left for dead in previous years, continued its outperformance over long-duration growth. Investors also preferred high quality and dividend paying stocks.
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