Investors appear increasingly optimistic regarding equity performance in the second half. However, frothy markets continue to create challenges this quarter and advisors looking to find opportunities within equities this year don’t want to miss the recent 2024 Equity Symposium hosted by VettaFi.
The symposium took place on March 13 and featured many perspectives from a range of asset managers. Equity investing topics covered included factors, valuation, thematic trends for this year, emerging markets, active management, and ex-U.S. investing. To watch and receive CE credits, you can register for the replay here.
2024 Equity Symposium: Which Factors Matter
U.S. equities historically netted investors substantial outperformance. Current levels of elevated concentration within U.S. equity indexes remain pronounced, however. Investors must find a way of balancing returns while minimizing risk.
Sarah Rich, VP, lead client PM at Goldman Sachs Asset Management, shared how the firm is thinking about U.S. investing and factors this year. Rich was joined by Allen Bond, CFA, managing director and head of research at Jensen Investment Management. Bond dove into the role of investor sentiment and discipline this year with Todd Rosenbluth, head of research at VettaFi.
You can find more detailed coverage of the session here: “U.S. Equities Remain Valuable Options, Goldman Says”
The Importance of Valuations and Fundamentals
Next on, Jodi Love, lead PM at T. Rowe Price, and Coulter Regal, ETF product manager at VanEck, joined Tom Lydon, vice chairman at VettaFi to discuss valuations and fundamentals.
Soaring valuations by a handful of companies continue to create challenges for investors. The bifurcation of market performance in 2023 between mega-cap companies and other market caps proved significant. It’s a narrative that could change in 2024, underscoring the importance of maintaining exposures beyond just the biggest performers.
Opportunities exist within quality and value stocks in particular, according to Love. It’s particularly noteworthy given the pullback by a handful of the Magnificent 7 companies in the first quarter, according to Regal.
Thematic Investing in 2024
The last few years have brought about a regime shift for markets. The advance of artificial intelligence, the geopolitical arena, market dispersion, and more all play a role in changing investment opportunities.
Arne Noack, head of systematic investment solutions, Americas at Xtrackers by DWS discussed this year’s thematic trends alongside Eli Horton, senior PM at TCW and Todd Rosenbluth. Top thematics likely to dominate markets this year include the energy transition, supply chain transformation, and geopolitical risk according to the pair.
Where Opportunity Exists in Emerging Markets
Looking beyond the U.S. for equity performance proved almost detrimental to portfolios for the last 15 years. That’s in large part due to the heavy tilt to industrials, financials, energy, and materials of EM countries according to Brendan Ahern, CIO of KraneShares. When looking beyond these value-tilted sectors, however, growth opportunities exist for investors.
Ahern was joined by Jay McAndrew, head of strategic beta sales at Columbia Threadneedle Investments. The two discussed EM investing this year and China with Tom Lydon.
You can find more detailed coverage of the session here: “Emerging Markets: Honing a China Allocation”
The Advantages of Active Strategies This Year
The ongoing market environment could strongly benefit discerning investors and strategies this year. Active management’s ability to capitalize on widening dispersions between sectors makes it particularly attractive. That’s according to Ned Durden, chief investment strategist and PM at WestEnd Advisors.
Durden alongside Bryan Hinmon, CIO, PM at Motley Fool Asset Management, discussed active investing and alpha opportunities with Todd Rosenbluth.
You can find more detailed coverage of the session here: “Advisors Should Consider Active ETFs in the Current Environment”
How to Think About International Equity Investing in 2024
Last on, Jeffrey Weniger, head of equity strategy at WisdomTree, talked international equities with Tom Lydon. Weniger discussed the underperformance of China in the last few years. This underperformance resulted in a reduction of China’s weight within many EM strategies. It’s created greater diversification within funds that now hold higher weights in a greater variety of EM countries.
Japan remains incredibly attractive this year. Weniger believes most U.S. investors remain underweight to this country. The WisdomTree Japan Hedged Smallcap Equity Fund (DXJS) offers exposure and rose 34.76% in 2023. The firm also offers the WisdomTree Emerging Markets Quality Dividend Growth Fund (DGRE).
To watch the full symposium and receive CE credits, you can register for the replay here.
For more news, information, and analysis, visit VettaFi | ETF Trends.