Second Quarter 2016 International Equity, International Small Cap, Midyear investment and Senior Vice President
International Equity hits 20 year track record
The Axiom International Equity Strategy launched on July 1, 1996 and has achieved an annualized, inception-to-date return of 12.7% gross of fees versus 4.4% for the MSCI ACWI ex USA benchmark as of June 30, 2016. Managed by Axiom’s founder and Chief Investment Officer, Andrew H. Jacobson, CFA, and co-managed by Bradley Amoils, the Strategy utilizes the same Dynamic Growth approach as all of Axiom’s strategies and leverages the firm’s six global sector analysts. Andrew and Bradley have collaborated together at Axiom for 14+ years and each have over 25 years of experience investing in global growth stocks.
Axiom Investors welcomes two new International Small Cap clients at the strategy’s two and half year mark
The Axiom International Small Cap Equity Strategy gained two institutional investor clients in the second quarter, bringing total assets under management to $219 million. As of June 30, 2016, the Strategy has achieved an annualized, inception-to-date return of 10.5% gross of fees versus -0.7% for the MSCI ACWI ex USA Small Cap benchmark. The Strategy, managed by Matthew Franco, CFA, a founding partner, and co-managed by Yogesh Borkar, CFA, utilizes the same Dynamic Growth approach as other Axiom strategies and leverages the firm’s six global sector analysts. Matt and Yogesh each have over 20 years of experience investing in international small cap stocks.
Midyear investment outlook by Axiom’s Chief Investment Officer
Public equities remain attractive relative to fixed income and cash. Earnings and dividend yield spreads, while off their post crisis peaks, remain at historically attractive levels versus benchmark 10 year yields. Real and, in the ‘safer’ countries, even nominal cash yields are negative. About 10 trillion dollars or approximately 40% of sovereign bond yields, spread across 14 different countries, are also now negative. In this context, it is perhaps not surprising that dividend yields are typically well above 10 year bond yields. The earnings and now dividend yield ‘advantage’ of equities in the context of historically low bond and cash yields is often summarized by the acronym ‘TINA’ which is short for “there is no alternative” notwithstanding the long list of concerns detailed above. Non US equities are relatively more attractively valued than US equities on such earnings and dividend yield ‘spread’ measures as well as on conventional P/E’s, P/CF’s and normalized P/E’s. Emerging Markets are particularly attractive on these measures, whereas the US market generally appears to be less attractively valued. Many headwinds remain. Corporate revenue and earnings growth continue to be challenged by low, often disappointing, nominal global GDP growth. Margins offer less upside now than in prior years. In the US, margins actually seem to have passed a historic peak and outside the US the pace of any productivity gains tends to be much slower for political and cultural reasons. Commodities, while still down year on year, do not seem to represent a significant upside lever looking forward. Many economic sectors, particularly finance, are contending with ever rising regulatory and political burdens. Post financial crisis and Arab spring, the global commitment to free markets, globalization and open borders appears to be ebbing, diminishing the outlook for trade and weighing on potential world growth. Deteriorating investor appetitive for highly levered enterprises, subordinated debt and IPO’s represent a headwind for both private equity and financial engineering driven earnings growth. In this context, we continue to believe the high quality, sustainable public equities offering superior and undervalued growth represent a significant absolute and relative return opportunity. View here.
Axiom Investors welcomes Senior Vice President, Client Service and Marketing
Axiom Investors is pleased to announce the appointment of Brian M. Bader as Senior Vice President, Client Service and Marketing. Brian joins Axiom Investors as a partner and is responsible for expanding relationships with financial institutions, which currently represent over 18% of Axiom Investors’ client base.
Prior to joining Axiom Investors, Brian was Head of Sales at Rainier Investment Management, an institutional asset management firm headquartered in Seattle, WA. During Brian’s 30 year career in the investment management industry, he has held leadership positions in distribution, business management and consulting. Prior to entering the investment business, Brian earned his B.S. in Economics from the State University of New York at Albany.
“I have worked with Brian for over seven years and am extremely excited that he is joining Axiom Investors,” said Kurt A. Polk, COO and Head of Global Distribution. “His solutions-based approach to client service and decades of experience are a natural fit for our culture and philosophy of partnering with clients.”