The Factor Report

Market Wrap-Up

Stocks were lower for the week ended September 25, 2020. There was very little data for investors to react to, but continued fears about a Covid resurgence weighed. Those fears were exacerbated by multiple warnings from Boris Johnson about further UK lockdowns to avoid such a resurgence. Economic data in the US was solid, but investors still approached with caution given the fact that, despite urging from Federal Reserve Bank, Chairman Powell, Congress still failed to come up with any kind of stimulus package. That may not be an issue as states approach new phases of reopening, but autumn may change things. Bonds had a volatile week, but they were essentially unchanged again. According to MarketWatch, the US 10-year treasury yield stayed at 0.677%.

Performance Summary

Geographically, the US had by far the strongest (i.e. least negative) week as international shares dropped by more than 4%. US Technology and Technology-related stocks continued to rule the markets direction and investors re-engaged them this week. Amazon in particular benefited from an analyst upgrade – well timed given the stock was already up 70% year-to-date. From a factor perspective, given the Tech rebound, Momentum, Quality, and Low Volatility outperformed at the expense of Value and Size. The long-term results continue to demonstrate factor efficacy, as shown in the table to the right. As can be seen, for the 10- and 15-year periods, 3 out of 5 factors win although Size is not far behind as a fourth factor.

In The News

• Please click here for a list of the top-paid Financial Services CEOs in 2019 and the ratio of their pay to their median employee pay.
• Please click here for a study on retirement saving habits. Only 1 in 10 had a plan and 2/3 said their employers didn’t help them with the transition.
• Please click here for a quiz on facts about social security. See how you score!

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.