Structured Global Equity
Strategies
When will Turvy Revert to Topsy
Even when the financial world seems to have gone topsy-turvy, we remain firm in our conviction that investors seeking the opportunities inherent in global investing will again reap rewards from participating in our intelligently structured, highly diversified global portfolios.
Following five years of gains, global stock markets collapsed in 2008, leaving investors little place to hide. The financial maelstrom hit every major world market. The sole assets to prosper were government bonds of developed countries and certain commodities like gold, where investors fled and prices rose. Global stocks lost 40 percent of their value in 2008, as calculated by the MSCI world index, erasing more than $29 trillion in value and eroding gains made since 2003.
The Dow Jones Euro Stoxx 600, a measure of the broad European market, finished the year down 46 percent; the MSCI Asia-Pacific was down 43 percent and the MSCI Emerging Markets index was down 53.2%. US stocks fared slightly better, with the S&P 500 falling 37 percent.
Despite better economic data in Europe and Asia than in the US, overseas stocks fell faster as panicking dollar-based investors repatriated investments. Germany, France, and Australia all dropped by more than 40%.
In Asia, Japan’s Nikkei Stock Average tumbled 42.1%, its worst-ever showing. But emerging markets suffered the most. China’s Shanghai composite index fell 65 percent while India’s Sensex 30 in Mumbai fell 52 percent.
Russia, down 72 percent, was hit hard. Its August conflict with Georgia coincided with the global financial crisis’s most virulent phase and a plunge in oil and natural gas prices. The ensuing investor turmoil exposed the weakness in the country’s banking system, prompting a huge government rescue package. Russia dedicated more than a quarter of its foreign exchange reserves — nearly $600 billion at their peak in August — to stem the ruble’s descent.
Coupled with the near-collapse of the world financial system and subsequent government takeover of banks, the commodities price bubble burst in the second half of the year. Oil prices that peaked in July at more than $147 a barrel, traded at year end slightly above $44, after falling to less than $40 a barrel.
Some analysts predict that the United States economy, which officially fell into recession in December 2007 and is poised to receive a stimulus package from Washington of as much as $1 trillion over the next two years, may actually lead the world out of the downturn in the second half of the year.
Oakwood Conservative
Global Equity
- Balance of value and growth
as well as large, medium and small capitalization stocks
- Suitable for investors
seeking income and long term capital appreciation
Oakwood Moderate
Global Equity
- Has an increased bias towards
value by using multiple asset classes and greater emphasis on smaller
capitalization stocks than the conservative strategy
- Suitable for investors seeking above average returns through long term capital appreciation
Oakwood Aggressive
Global Equity
- Has a higher component
of non-US companies, as well as a greater value tilt and emphasis on
smaller capitalization stocks than the moderate strategy
- Suitable for investors with a higher tolerance for risk seeking higher returns through long term capital appreciation
