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Ryan Nauman
VP, Product and Market Strategist
Stephen Berei
VP, Client Services & Implementation
Jeremy Poulin
Senior Client Consultant

Q3 2016 PSN Top Guns – Additional Stimulus Propels Markets

Nov 29, 2016 Ryan Nauman

Equity markets around the world didn’t allow the Brexit results to hold them down during the third quarter, as the primary global equity markets rallied. Investors’ confidence increased as it became clearer that the Brexit fallout would have a muted immediate impact on the global economy. The Federal Reserve left interest rates untouched during the quarter and yields on global sovereign debt remained at all-time lows with a record amount of sovereign debt trading at negative yields.

Improved economic data, along with a continued accommodative monetary policy by the Federal Reserve, lead to a “risk on” environment. U.S. equities rallied during the quarter, with the Russell 3000 index posting a +4.40 percent return, and small caps leading the way. Investors were rewarded for moving down the size spectrum, as the Russell 2000 index posted a stellar +9.05 percent return for the quarter. Below are some of the strategies that make up the Small Cap PSN Top Guns.

  • Schneider Capital Management Company: Small Cap Value (+27.3% for the quarter)
  • Bares Capital Management: Bares Small Cap (+19.7% for the quarter)
  • Kopp Investment Advisors: AccruHealth (+18.6% for the quarter)

Emerging equity markets (MSCI Emerging Markets index +9.15%) benefited as the world’s central banks provided additional stimulus, which helped stabilize commodity prices and provide a boost to the commodity rich regions. Fiscal stimulus in China, along with data suggesting that their economic environment is stabilizing, provided a boost to Chinese stocks, which was the top emerging market. The following strategies made the PSN Top Guns list for the Emerging Markets Universe.

  • Mirae Asset Global Investments: Russia Sector Leader Equity (+16.5% for the quarter)
  • Baillie Gifford Overseas Limited: Greater China (+16.3% for the quarter)
  • Oberweis Asset Mgmt: China Opportunities (+15.5% for the quarter)

Uncertainty surrounding the Federal Reserve’s next move, and changing economic sentiment, caused another volatile quarter for the 10-year U.S. Treasury yield. The hunt for yield and continued inaction by the Federal Reserve, partnered with hints that future rate hikes will be gradual, lead to a positive quarter for U.S. corporate bonds (Bloomberg Barclays U.S. Aggregate index +0.46%). Below are some of the strategies that make up the PSN Top Guns Core Plus Universe.

  • Altrius Capital Management: Unconstrained Fixed Income (+6.4% for the quarter)
  • Eaton Vance Management: Multi-Sector Bond (+5.4% for the quarter)
  • Neuberger Berman: Opportunistic Credit (+4.2% for the quarter)

The complete list of PSN Top Guns and an overview of the methodology can be located on www.informais.com under the “Resources” tab.  If you do not have a login, you can complete the registration process for complimentary access.  For more details on the methodology behind the PSN Top Guns Rankings, or to purchase PSN Top Guns Reports, contact Ruth Calderon at ruth.calderon@informais.com.

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