Structured Global Equity
Strategies
An International Flair
While investors in US-focused investments have enjoyed large gains as the market recovers, investors in international markets enjoyed even larger gains in the third quarter. Stocks worldwide continued to climb off their bear-market lows of March. Gains by many established European markets also outpaced the second quarter. Emerging markets also rose, but at a slower rate.
In Europe, shares rose on a tide of easy credit and ‘green shoots’ of economic turnaround. The UK, German and French indexes all finished the quarter higher. France’s CAC-40 was up 21%; the UK’s FTSE 100 gained 21%; and Germany’s DAX added 18%. Across Europe, it was the financial sector that recovered most dramatically.
The outperformance of international stocks reflects the fact that they fell even further than their US domestic stock counterparts during the crash.
Beyond recent results, favorable underlying trends contribute to the allure of emerging markets and global real estate. Government, corporate and household debt in emerging market countries remains modest — especially relative to developed nations. Demographics — a relatively young population and a growing middle class — also favor growth.
In Asia, however, China’s Shanghai Composite Index faltered in the third quarter, down 6.1%. But, the index had already gained almost 63% in the first half of 2009, on signs that the Chinese economy had bottomed out. Over the summer, slowing bank lending worried investors, raising the possibility that the Chinese recovery was perhaps not sustainable. As the fourth quarter kicks in, we see China reverting to the continuation of its strong recovery.
Japan’s Nikkei Stock Average of 225 companies rose just 1.8% in the quarter. The yen strengthened against the US dollar, which their new government hasn’t tried to curb. That marks a change from prior years, when the Bank of Japan often intervened to keep the Japanese currency weak. Excessive yen strength could hurt the profitability of some of the larger Japanese exporters. Japan is very export-oriented. A muted recovery in global consumption is a challenge to the Japanese market.
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
