The Top 10 Contributors to Relative Performance
WTESC vs. European Large Caps from (6/29/2012 to 12/31/2013)
Average Annual Returns (as of 12/31/2013)
Completion and Complementarity
In our prior blog post, which focused on WTESC’s sector exposures and their resultant attribution over this same period, we concluded with emphasizing WTESC’s potential complementarity to more large-cap-focused approaches. We believe the same can be said for this analysis of country exposures. Within Europe, a focus on large-cap stocks results in different sector exposures across countries than does a focus on small-cap stocks. For example, in the United Kingdom, which we highlighted earlier, a focus on small caps delivered greater economic sensitivity and under-weights to typically defensive sectors (Consumer Staples, Health Care, Telecommunication Services and Utilities), as well as Financials and Energy. In looking at ways to generate European equity exposure, small caps could offer a potentially differentiated approach and performance experience across different country markets.
1Source: Bloomberg, period 6/29/2012 to 12/31/2013.
2Source: Bloomberg; refers to average % weight and attribution for period 6/29/2012 to 12/31/2013.
3Source: Bloomberg; refers to average % weight an attribution for period 6/29/2012 to 12/31/2013.
4Source: Bloomberg; period 6/29/2012 to 12/31/2013.
Important Risks Related to this Article
Investments focused in Europe are increasing the impact of events and developments associated with the region, which can adversely affect performance. Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. Investments focusing on certain sectors and/or smaller companies increase their vulnerability to any single economic or regulatory development. This may result in greater share price volatility.Recent growth rate in the stock market has helped to produce short-term returns for some asset classes.