The Factor Report

Market Wrap

Stocks stumbled around, but ultimately found their way higher for the week ended April 9, 2021. Despite a hiccup early in the week centered around blood clotting in the Johnson & Johnson Covid vaccine and a pause in its distribution, investors found plenty of items to cheer. This week kicked off earnings season in the US and companies did not disappoint. Most of week was dominated by banks and major players like Goldman Sachs delivered results ahead of expectations. The release of encouraging news on the economic front also led to confidence as jobless claims continued to fall and retail sales showed the rebound continues. Those who had begun to capitulate on Tech and Tech-related stocks earlier in the year were encouraged by falling rates. For the week, bonds ended marginally higher as the yield on the US 10-year treasury note fell by about 0.06% to 1.58%, according to MarketWatch.

Performance Summary

Geographically, stocks were fairly clustered. Non-US Developed won the week, but the US and Emerging Markets were evenly matched and not far behind. From a factor perspective, Momentum had another strong week and was joined by Low Volatility in outperforming the broader market. The long-term results continue to demonstrate factor efficacy, as shown in the table to the right (still as of the prior week). As can be seen, for the 15-year periods 3 out of 5 factors win although Size is close for a fourth.

In The News

Please click here for a considerations of whether or not to convert a Traditional IRA to a Roth IRA ahead of Biden’s infrastructure plan.

Please click here for a look at the negative impact on Morgan Stanley’s earnings from its exposure to one investment. This is a great study on why we don’t use hedge funds or concentrate investments.

Please click here for a discussion about the upcoming bill to again push back the age for Required Minimum Distributions from retirement accounts, this time to 75.

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)

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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.