Domestic markets continued to stiff arm obstacles, as they reached new highs during the third quarter, fending off devastating hurricanes, political unrest with North Korea, gridlock over fiscal policy, increased tension with Russia, and the upcoming Federal Reserve balance sheet tapering. Regardless of the obstacles, corporate earnings continued to improve, and the global economy expanded, resulting in solid quarterly gains for the major global indexes (MSCI World index +4.96% for the third quarter), and pushing year-to-date returns into the double digits (MSCI World index +16.53% YTD).
Higher than expected corporate earnings during the quarter provided tailwinds for domestic equities. Growth funds, benefiting from a robust quarter for the information technology sector, continued to outpace value funds across the size spectrum. Large growth funds, measured by the Russell 1000 Growth index, continued its stellar year with a +5.90% return during the quarter. Below are some of the strategies that make up the PSN Top Guns Large Cap Growth Universe.
- Marsico Capital Management, LLC.: Select Alpha Growth (+12.2% for the quarter)
- Merlin Asset Management: Merlin Dynamic LCG Equity (MO25V) (+11.5% for the quarter)
- Navellier & Associates, Inc: Large Growth - Institutional (+10.3% for the quarter)
The third quarter marked the sixth consecutive quarter of economic growth for the expanding Japanese economy. An increase in inflation and household spending, along with low unemployment rates, attributed to a 4.1% increase for the MSCI Japan index during the quarter, a solid number on its own, but lagged most other developed markets. The following strategies made the PSN Top Guns list for the Japan Universe.
- Daiwa SB Investments (USA) Ltd.: Japan Eq. Mid-Small Cap GARP (+8.4% for the quarter)
- Dimensional Fund Advisors: Japanese Small Cap Eq (+7.8% for the quarter)
- Sompo Japan Nipponkoa Asset Mngt.: Japan Value Equity Concentrated (+6.6% for the quarter)
The Federal Reserve held off on hiking rates during the quarter, however, their announced plan to taper their balance sheet pushed rates higher across the Treasury yield curve, which also flattened during the quarter. Fixed income sectors posted positive gains across the board, while high yield bonds lead the way (BofA Merrill Lynch High Yield index +2.03%), benefiting from rising corporate earnings, and oil prices. Below are some of the strategies that make up the PSN Top Guns High Yield Universe.
- J.P. Morgan Asset Management: JPM Distressed Debt (+4.4% for the quarter)
- Van Eck Associates Corporation: Fallen Angel High Yield Strategy (+3.5% for the quarter)
- Horizon Institutional: High Yield Opportunity (+3.0% 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 may register 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 firstname.lastname@example.org.
VP, Product and Market Strategist
Informa Investment Solutions
Tel: (800) 789-5323