All posts in category: Diversification (26)

Systematic Diversification

Wednesday, April 12th, 2017

A stylistic guide to international equities

What’s the best way of allocating an equity portfolio between the equity indices of the US and another country? We use nine different styles to discover the best regime for each individual country over the last 21 years. Sometimes the quest is hopeless; there is no way of beating the US by diversifying into any Eurozone country. But for the rest of the world, there is nearly always a process which has worked.

Filed under: Categories: , ,
Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN

Di-Worse-ification

Wednesday, April 5th, 2017

US buys the Eurozone for a trade, not forever.

Everybody seems to be increasing their exposure to Eurozone Equities at the same time. We agree with the trade but are cautious about some of the commentary. Eurozone investors need US equities to construct risk-efficient portfolios, but US investors do not need Eurozone equities in the same way. They do, however, need Emerging Markets.

Filed under: Categories: , ,
Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN

Where To Next?

Wednesday, March 29th, 2017

US investors need to diversify geographically

US Equities look as though they are due a 5-10% correction, so US investors have a chance to look at other opportunities. One option is a Northern Europe group of fiscally responsible countries in and out of the Eurozone. Our preferred option is a diverse group of EMs, including India, Korea, Mexico, South Africa and Turkey, which offer equivalent risk-adjusted returns, but much lower correlation with US Equities.

Filed under: Categories: , , ,
Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN

Rolling the Dice Again

Wednesday, October 12th, 2016

The low conviction search for US equity alpha

Our US equity model has suddenly started dumping defensives and buying cyclicals and Financials. It looks as though US investors are rolling the dice again. Their only hope of outperforming in a dull year is to generate some alpha in their US equity portfolio, but it’s a low conviction trade.

Filed under: Categories: , ,
Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN

Diversification in a Positive World

Wednesday, September 21st, 2016

Greater China is negatively correlated

This is the second part of our exercise looking at ways in which investors can diversify away from the threat of falling US Treasuries. This week we focus on global equities and argue that the best protection is offered by Greater China (including Taiwan and Hong Kong). This region is also on the positive watch-list in our All-World Country Equity Report.

Filed under: Categories: , , , ,
Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN

The Way We Live Now

Wednesday, September 7th, 2016

Positive correlation meets asset allocation theory

Most of the major developed equity markets, except the US, are positively correlated with their local government bond market. This makes portfolio diversification very difficult, but the basic conclusion is that if you think government bonds are going to fall, you should expect equities to fall further.

Filed under: Categories: , , ,
Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN