The Factor Report

Market Wrap-Up

In a reversal of the prior week’s optimism, stocks were lower for the week ended June 26, 2020. Investors tried to be positive here and there, particularly after an employment report that showed US jobless claims remained in a down trend and continuing claims fell (indicating some people were getting back to work). However, that was overwhelmed by that data potentially turning negative again as Covid cases increased dramatically, especially in the US. The fear of reversing re-openings was confirmed in places like Texas, which is rolling back its process. For all of the same reasons, bonds had a strong week, with the US 10-year treasury yield down to 0.64% according to CNBC.

Performance Summary

Geographically, Emerging Markets was the winner for the week, coming in just shy of flat, while the US led the way lower. From a factor perspective, all factors except Value outperformed for the week. The exclusion of Value is a technicality as it delivered the same return as the broader market index. The long-term results continue to demonstrate factor efficacy, as shown in the table to the right. As can be seen, for the 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 an article discussing how financial advisors are compensated.

Please click here for an article discussing the SEC’s recent court room win that essentially allows advisors to avoid being fiduciaries under the “Best Interest” regulation.

Please click here for an opinion piece on the dominance of the FAANG stocks in the S&P 500.

Please click here for an article discussing extended IRS relief on RMDs (required minimum distributions).

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.