Latest news with #MSCIAllCountryWorldex-USIndex
Mint
23-05-2025
- Business
- Mint
Greed & Fear: Jefferies' Chris Wood predicts end of US market dominance, bets on Asia, defence stocks
Global equity landscape is undergoing a paradigm shift, with Jefferies' Christopher Wood anticipating a long-term decline in US market dominance, weakening of the dollar, and a reallocation toward Asian assets and defence plays. In his latest GREED & fear report titled "The End of an Era", Christopher Wood, Global Head of Equity Strategy at Jefferies, declared that the American equity market has likely passed its peak influence. He pointed to the technical breakout of the MSCI All Country World ex-US Index—unchanged since 2007—as strong evidence of this shift. As of December 2024, US stocks accounted for 67.2 percent of the global index, despite representing just 26.4 percent of global GDP in nominal terms and 14.9 percent on a purchasing power parity basis. Wood argued this disparity suggests a structural overvaluation of US equities and foretells a longer-term weakening of the US dollar. He said, 'This is technical confirmation of GREED & fear's continuing base case,' suggesting that the global market cycle is now favouring non-US assets. According to Wood, the dollar's decline is inevitable due to several catalysts. One is political: former President Donald Trump's preference for a weaker dollar and his unpredictability regarding economic policy, particularly tariffs. Another is structural: the unsustainable fiscal path taken by the US government post-Covid. The resulting pressure could lead to financial repression and yield curve control—both of which are bearish for the greenback. He noted, 'The most important reason to assume a long-term weakening of the US dollar is America's extreme fiscal deterioration,' which could result in capital restrictions and currency controls. In stark contrast to the US dollar, Wood projected long-term appreciation for Asian currencies. This, he argued, would be a reversal of the post-Asian Crisis currency devaluation that persisted for three decades. He pointed to the region's strong savings rate, with emerging Asia recording 39 percent of GDP in gross national savings in 2024 compared to just 17.3 percent in the US, as per IMF data. He cited Trump's mercantilist policy stance and the region's financial prudence as core reasons for sustained currency strength across Asia. Wood's bullish stance extended to European equities—particularly defence and banking stocks. With Germany planning to increase its defence spending to 5 percent of GDP, Wood emphasized this as evidence that Europe is 'waking up' to its geopolitical responsibilities. He reaffirmed a long-standing pair trade: long European defence stocks and short American ones. The MSCI Eurozone Aerospace & Defense Index has outperformed its US counterpart by 31 percent since December 2024. GREED & fear continues to advocate holding European banks, citing improved loan growth in countries like Greece and Spain, where credit expansion has resumed after a prolonged downturn. While celebrating the market's recent rebound, Wood warned about the underlying fragility in private equity and credit markets. He noted that the S&P Listed Private Equity Index dropped 27.1 percent during a risk-off period and flagged systemic risks due to the growing bank exposure to non-bank financial institutions (NBFIs). Loans to NBFIs hit USD 1.2 trillion in March 2025—a 20 percent year-on-year jump. He warned that 'private equity and private credit will be the big losers in any US downturn,' with top institutions like Harvard and Yale already attempting to offload billions in PE exposure. Regulatory concerns are also mounting, as the IMF noted over 40 percent of private credit borrowers had negative free cash flow at the end of 2024. Wood also raised concerns about the ongoing AI-driven capex boom in Big Tech. Despite massive spending, he questioned the long-term viability of these investments, calling them potentially a 'misallocation of capital.' He cited decentralized AI alternatives such as Tether's upcoming QVAC platform as potential threats to the current tech hegemony, which he described as "surveillance capitalism." Still, GREED & fear is keeping a hedged position by maintaining a 4 percent allocation in Nvidia, down from 7 percent at the end of 2023. On geopolitical risks, Wood critiqued the Western media's emphasis on ceasefires in Ukraine. He reiterated that Russia remains firm on four conditions for peace: Ukraine's neutrality, cessation of Western arms shipments, recognition of Russian territorial control, and full troop withdrawal by Ukraine. He suggested the US, particularly Trump, holds more leverage over the conflict by controlling funding, rather than military support. Wood's comprehensive outlook is clear: investors should brace for a rebalancing of global equity power away from the US. With American fiscal stability in question, Big Tech potentially overextended, and geopolitical risks on the rise, he advocated a rotation toward Asian currencies, European defence, and select global value plays. His global portfolio reflects this thesis with top holdings in names like Capricorn Metals (Australia), BYD and Tencent (China), Zomato and ICICI Bank (India), TSMC (Taiwan), Petrobras (Brazil), Societe Generale (France), and Freeport-McMoRan (US). His only US tech holding remains Nvidia—a strategic hedge in the unfolding AI arms race. Wood's thesis in GREED & fear: The End of an Era is a clarion call for investors to adapt to the shifting tides of global finance. As the US's market dominance wanes, the next chapter of investment leadership may be written from Asia and Europe. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Yahoo
25-03-2025
- Business
- Yahoo
Loomis Sayles Celebrates 5-Year Anniversary of Growth Equity Strategies Team's International Growth Strategy
The strategy is among a suite of equity offerings managed by Aziz V. Hamzaogullari, founder, chief investment officer and portfolio manager of the Loomis Sayles Growth Equity Strategies (GES) Team. Since inception, International Growth has outperformed its benchmark on an annualized basis and achieved top quintile ranking versus peers for risk-adjusted measures of return. BOSTON, March 25, 2025--(BUSINESS WIRE)--Loomis, Sayles & Company celebrates the five-year anniversary of the Loomis Sayles International Growth strategy. Managed by Aziz V. Hamzaogullari, founder, chief investment officer and portfolio manager of the Loomis Sayles Growth Equity Strategies (GES) Team, the $39.3 million strategy has delivered its investors strong risk-adjusted returns since inception on 1 January 2020. The GES Team has $89.5 billion in total assets under management as of 31 December 2024 across a suite of offerings, including US domestic, global, international, and long/short growth equity strategies. A singular differentiated investment philosophy – supported by a proprietary seven-step research framework – underpins their long-term, private equity approach. The team seeks to invest in those few high-quality businesses with sustainable competitive advantages and profitable growth only when they trade at a discount to the GES estimate of intrinsic value. The International Growth strategy seeks to produce long-term, excess returns vs. the MSCI All Country World ex-US Index on a risk-adjusted basis over a full market cycle (at least 5 years) through bottom-up stock selection. Over the last five years since inception, the International Growth strategy has: Outperformed the MSCI ACWI ex US Index by 3.17% (gross), 2.31% (net) annualized. The strategy ranked in the top quintile for performance – 15th percentile (gross), 14th percentile (net) – versus peers (inception through 31 December 2024). Ranked top quintile versus peers for risk-adjusted measures of return including Sharpe ratio (15th percentile) and Alpha generation (12th percentile gross and net). Achieved up market capture since inception exceeding 110 versus benchmark, while down market capture has been in the 90s, similar to the GES Team's longer-dated strategies. Further, with annualized turnover of 7.5% since inception, International Growth has benefited from the GES Team's dedication to a long investment horizon, which affords the opportunity to capture value from secular growth as well as capitalize on the stock market's shortsightedness through time arbitrage. The high-conviction portfolio of 35 securities reflects the team's belief that less than one percent of all businesses are able to sustain their competitive advantages beyond a decade and can generate durable and profitable long-term growth, a rare trait. With high median active share since inception of 92.0%, International Growth has exhibited the necessary condition for generating alpha and outperforming net of fees over the long term. Learn more about the Loomis Sayles International Growth Strategy, including current performance. "In just five years since the strategy's inception, the GES Team has achieved an impressive performance track record for International Growth that echoes those of its longer-dated sibling strategies, including Large Cap Growth, All Cap Growth and Global Growth," said Kevin Charleston, chief executive officer of Loomis Sayles. "This success is a testament to the team's passion for a patient, disciplined investment process and commitment to deep fundamental research with a long-term view, a philosophy that continues to deliver value for our investors." "We believe the qualities that make a business great are universal in nature," said Hamzaogullari. "Regardless of location or domicile, structural drivers for sound investment decision making and analysis such as basic business characteristics, competitive advantage, business model, financial strength, management, growth drivers and valuation remain the same." Learn more about the Loomis Sayles Growth Equity Strategies Team. MSCI DISCLOSURE Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI's express written consent ABOUT LOOMIS SAYLES Since 1926, Loomis, Sayles & Company has helped fulfill the investment needs of institutional and mutual fund clients worldwide. The firm's performance-driven investors integrate deep proprietary research and risk analysis to make informed, judicious decisions. Teams of portfolio managers, strategists, research analysts and traders collaborate to assess market sectors and identify investment opportunities wherever they may lie, within traditional asset classes or among a range of alternative investments. Loomis Sayles has the resources, foresight and the flexibility to look far and wide for value in broad and narrow markets in its commitment to deliver attractive, risk-adjusted returns for clients. This rich tradition has earned Loomis Sayles the trust and respect of clients worldwide, for whom it manages $389.3 billion* in assets (as of 31 December 2024). *Includes the assets of both Loomis, Sayles & Co., LP, and Loomis Sayles Trust Company, LLC. ($47.1 billion for the Loomis Sayles Trust Company). Loomis Sayles Trust Company is a wholly owned subsidiary of Loomis, Sayles & Company, L.P. SAIF-f4tnxlxi View source version on Contacts Kate Sheehan(617) 960-4447ksheehan@ Sign in to access your portfolio
