The Factor Report

Market Wrap-Up

Stocks resumed their winning ways for the week ended May 22, 2020. The market got off to a strong start after Moderna announced positive results for a Covid vaccine, although those results were later called into question. Nonetheless, investors cheered the fact that jobless claims in the US, while still over 2 million, continued to decline. Buyers also got a boost from comments made by Fed Chairman Powell indicating that the Federal Reserve still has powder ready to help shorten or curtail the recession that is already underway. Although they spiked lower early in the week, bonds ultimately fell moderately as the US 10-year treasury yield ended the week marginally higher at 0.659%, according to MarketWatch. 

Performance Summary

Geographically, the US fared best, although Non-US Developed shares weren’t far behind. From a factor perspective, no factors were able to beat a simple market index this week, although Quality had a strong week. The long-term results continue to demonstrate factor efficacy, as shown in the table to the right. As can be seen, for the YTD, 3-Year, 5-Year, and 10-Year periods, 3 of 5 factors do better than the market. Over 15 years, 4 out of 5 win.

In The News

Please click here for a piece that looks at stocks and bonds moving the same direction and what that tells us.

Please click here for an article with comments from the late (great) Jack Bogle on why 401k savings aren’t enough.

Please click here for a link to the IRS website detailing traditional and Roth IRA contribution limits and taxability.

Disclosures

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s). Moreover, you should not assume that any of the above content serves as the receipt of, or as a substitute for, personalized investment advice from Metric Financial.

USA is the MSCI USA index, Non-US Developed is the MSCI EAFE index, Emerging Markets is the MSCI Emerging Markets index, and All Country World is the MSCI ACWI index. One cannot invest in an index. Because the factor indexes have varying inception dates, some of the returns provided are back-tested and do not represent actual performance. Inception dates are as follows:

Momentum = MSCI ACWI Momentum NR USD Index (Inception: 11/30/95)

Value = MSCI ACWI Enhanced Value NR USD Index (Inception: 5/29/15)

Quality = MSCI ACWI Quality NR USD Index (Inception: 5/29/92)

Low Volatility = MSCI ACWI Minimum Volatility (USD) NR USD Index (Inception: 5/28/93)

Size = MSCI ACWI Risk Weighted NR USD Index (Inception: 4/6/11)

Metric Financial, LLC (“Metric”) is a registered investment adviser offering advisory services in the State of Connecticut and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. Follow-up or individualized responses to consumers in a particular state by Metric in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant to an applicable state exemption.

All written content is for information purposes only. Opinions expressed herein are solely those of Metric, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.