Equities

Stay ahead of the markets with our September 2024 Market Pulse, exploring the anticipated impact of the Fed's first rate cut and the evolving risks in equities.

As the U.S. economy remains resilient and inflation shows signs of moderating, the Fed is holding interest rates steady, aiming for a 2 percent inflation target. Meanwhile, the stock market has reached new highs driven by robust corporate profits and AI optimism, although high valuations may limit future gains.

The question of "how concerned should investors be about the Western Alliance" is being raised on both sides of the Atlantic following recent statements by former President Donald Trump regarding NATO, in which he indicated a willingness to support Russia in its actions against NATO members who fall short on defense-spending goals.

Last year was not a good time for China’s stock markets to say the least. The Shanghai CSI index and Hong Kong index ended 2023 down by 11% and 14%, respectively, while the MSCI World index closed the year 22% higher.

Given recent market volatility following events in the U.S. banking system, we wanted to provide you with our outlook and how Fort Washington is positioning Focused Equity portfolios.

We believe value investing, properly applied with a forward-looking framework, continues to have a bright future regardless of whether the value or growth factor leads going forward. 

Fort Washington's Multi-Asset approach overcomes shortcomings associated with traditional balanced stock/bond portfolios while adding value through active management.

Small cap stocks have generated attractive investment returns over the long term. In addition, the profitable segment of small cap stocks has outperformed unprofitable small cap stocks with significantly lower volatility over time. The Fort Washington Small Company Equity strategy only invests in profitable small cap stocks, avoiding unprofitable small cap stocks and reducing the risk levels of investing in small cap stocks. 

Our latest white paper explains our belief that small cap stocks are an inefficient asset class and that the key to capitalizing upon these inefficiencies is through the application of a consistent, differentiated approach that focuses on downside risk. 

Small cap stocks have generated attractive investment returns relative to other asset classes and stock market capitalization segments over time. We offer a look at inefficiencies within the asset class and drivers of small cap returns.