“Purgatory for Pessimists” — International Equities
An Unemotional, Factor-Based Approach

Categories Author: Ehren Stanhope, International, Investing, OSAM Research

The current Bull Market has been unkind to non-U.S. allocations. At a conference I recently attended, the term TINA1 (there is no alternative) was overheard, more than once, in the context of allocating investor portfolios. Expected returns on fixed income are likely to be low, and identifying top quartile alts managers — let alone gaining access to them — is increasingly difficult. Continue reading ““Purgatory for Pessimists” — International Equities
An Unemotional, Factor-Based Approach”

Microcaps’ Factor Spreads, Structural Biases,
and the Institutional Imperative
(Part 2 of 2)

Categories Author: Ehren Stanhope, Investing, Market Cap

In the first part of this 2-part article, we define microcap stocks and their unique, transitory nature. This second part guides investors through the factor landscape in Micro and explores where investors can expect to find opportunities.

Factor investing is more effective in Micro than in any other cap range

Though factor investing has rooted itself squarely in large cap equities, we believe it significantly more effective in small and microcap — the eclectic corners of the market. Continue reading “Microcaps’ Factor Spreads, Structural Biases,
and the Institutional Imperative
(Part 2 of 2)”

Microcaps’ Factor Spreads, Structural Biases,
and the Institutional Imperative
(Part 1 of 2)

Categories Author: Ehren Stanhope, Investing, Market Cap

The ironic twist to the proliferation of “factor”-based strategies in recent years is that the overwhelming majority of these strategies are1 launching in U.S. Large Cap Equity — the most competitive arena for any financial market in the world. Sure, factors can be effective in large cap but, lately, discerning investors are discovering that the factor research in eclectic corners of the market is much more compelling. This article presents our findings in perhaps the most capacity-constrained of those eclectic corners: microcap. Despite some unique considerations as it relates to liquidity and tradability (see Part 2), the opportunity in Micro is hard to ignore.2 Continue reading “Microcaps’ Factor Spreads, Structural Biases,
and the Institutional Imperative
(Part 1 of 2)”

OSAM Guide to Factor AlphaSM

Categories Author: Ehren Stanhope, Investing, Market Cap, Momentum, Quality, Value, Yield

BACKGROUND: We invest deeply in our in-house research, trading, and technology platforms and 100% of the research feeding our investment process is conducted internally. In most cases, our exhaustive study of fundamental investment characteristics leads us to redefine industry-standard metrics at the most granular level in order to boost the accuracy and strength of the signal. We’re fortunate to have a core team of Researchers & Technologists who all share a passion for, and background in, factor-based investing (visit our Blog archives for more background). As a result, OSAM is a living, breathing, evolving, team-based research project. This Guide is an overview of our findings. Continue reading “OSAM Guide to Factor AlphaSM

Webinar Replay:
5 Considerations for Equity Income Investors

Categories Author: Ehren Stanhope, Income, Investing, Yield

Ehren Stanhope photoGenerating income in client portfolios has always been tough.1 And — prospects for rising rates notwithstanding — it will likely be a challenge for years to come. Ehren Stanhope, CFA (OSAM Principal and Client Portfolio Manager) shares his expertise in global dividend-paying stocks, following up on his Dec-2016 postContinue reading “Webinar Replay:
5 Considerations for Equity Income Investors”

A Factor Investor’s Perspective
on the Economic Cycle

Categories Author: Ehren Stanhope, Investing, Momentum, Quality, Value

diagram

“If you spend more than 13 minutes analyzing economic and market forecasts, you’ve wasted 10 minutes.”

— Peter Lynch

Though unpredictable, the economic cycle has significant implications for investors. Given the vast amount of evidence that certain themes consistently outperform — and underperform — throughout the cycle, an allocation to passive market cap-weighted indexes almost seems naive. Continue reading “A Factor Investor’s Perspective
on the Economic Cycle”

3 More Considerations for Equity Income Investors

Categories Author: Ehren Stanhope, Income, Investing

In Part 1, I discussed the massive flows to dividend-paying stocks in recent years, dividend yield’s poor performance1 as an investment factor, and notes of caution for the upcoming rising rate environment. Here are 3 additional considerations and suggestions that address the vehicles most commonly used to access the dividend theme, the popularity of dividend growth, and the importance of valuation in making dividend investments. Continue reading “3 More Considerations for Equity Income Investors”

Equity Income — 2 (of 5) Key Considerations for Investors

Categories Author: Ehren Stanhope, Income, Investing

Here I’ll cover the first 2 of the 5 key considerations for equity income investors, and 3 more in Part 2.

At a time when demand for income generating assets is at an all-time high, the yields on income generating assets are at, or near, all-time lows. While the headlines often speak to the number of Baby Boomers entering retirement, the more important statistic is actually the amount of wealth entering retirement. Continue reading “Equity Income — 2 (of 5) Key Considerations for Investors”

Small Cap Equities — Inefficient & Opportune
(Part 2 of 2)

Categories Author: Chris Meredith, Author: Ehren Stanhope, Investing, U.S., Value

(Part 1 linked here)

Avoid Value Traps via a Quality Overlay

Not every cheap stock outperforms. Even within the cheapest decile of value, there is wide dispersion in underlying stock returns. Certain stocks are cheap for a reason: value traps. Continue reading “Small Cap Equities — Inefficient & Opportune
(Part 2 of 2)”

Small Cap Equities — Inefficient & Opportune
(Part 1 of 2)

Categories Author: Chris Meredith, Author: Ehren Stanhope, Investing, U.S., Value

Small cap equities1 are generally misunderstood and underappreciated. We believe they present a phenomenal total return opportunity for discerning long-term investors. The construction of common small cap indices and the nuances of the small cap universe favor an active approach. Continue reading “Small Cap Equities — Inefficient & Opportune
(Part 1 of 2)”