Quarterly report Q4 2017 - Value Equities

Healthy markets and decent performance

Global equity markets extended their gains in the last quarter of 2017. Over the entire year, developed markets posted healthy returns, with MSCI World up almost eight percent and European markets up even more. However, emerging markets stood out, rising over 20 percent on the back of robust growth in corporate earnings.

In the last quarter and over the entire year, our funds generally delivered strong results in both absolute and relative terms. This was despite 2017 being a year where value stocks overall did not perform particularly well. In global developed markets, value stocks were over nine percentage points behind growth stocks (as measured by MSCI indexes). In emerging markets, the gap was even wider, with value stocks over 16 percentage points behind growth. Those are the widest value-growth performance gaps in many years. Despite those headwinds, our value funds gave encouraging returns. The global developed market funds were more or less in line with MSCI World, the European fund was above benchmark, and the emerging market fund lagged MSCI EM slightly, but significantly outpaced MSCI EM Value. If we look at the year-to-date performance in 2018, equity investors have plenty of reasons to be happy. Returns have been positive, volatility is low and corporate profits are strong globally. 

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