Topical Insights
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Current Perspective on the Microcap Investment Cycle |
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Brandywine Global initiated its Domestic Microcap Equity strategy on January 1, 2006. The strategy seeks to own a widely diversified portfolio of U.S. securities with market capitalizations between $50 and $700 million at purchase. The portfolio consists of roughly 50 securities selected based on bottom-up, fundamental analysis. Returns are benchmarked to the Russell Microcap? Index. The Russell Microcap Index includes the smallest 1,000 securities in the small-cap Russell 2000® Index plus the next 1,000 securities. In the aggregate, these securities account for less than 3% of the U.S. equity market. | More |
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Brandywine Global Currency Commentary |
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Historically, lower Fed funds and bond yields act as automatic stabilizers of growth by encouraging demand for credit and spending. This time around, however, disruptions in the operation of the financial system have neutralized the influence of lower Treasury yields. Consequently, the dollar has borne the burden of adjustment in acting as a counter-weight to the slowdown unfolding in the U.S. economy and has probably fallen much further than might otherwise have been the case had credit markets been functioning more normally. | More |
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Quarterly Market Insight - January 2008 |
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The recent plunge in global equity markets appears to be anticipating a sharp drop in economic activity and corporate profits in 2008. Policy makers in the U.S. have responded aggressively to the numerous signs of weakening economic activity and increasing financial distress. Our judgment is that the combination of low interest rates, stimulative monetary policy and tax relief will prevent the present slowdown from deteriorating into a severe recession. | More |
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Brandywine Global's Market Perspectives - Mid-August 2007 |
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What started as a sharp decline in a relatively obscure corner of the U.S. capital markets has morphed into a significant shock to the global financial system. In fact, it is clear that capital markets have recently passed into a state of disintermediation, with investors selling all manner of risk assets and looking to buy U.S. Treasuries. High-yield debt, equities, precious metals, oil, and higher yielding currencies have been caught in the crossfire of fast and furious selling. | More |
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Value and Growth Cycles |
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Over the past seven years, U.S. equity investors have witnessed significant outperformance by value over growth as evidenced by the fact that the Russell 1000 Value Index has outpaced the Russell 1000 Growth Index by 15% per annum since the June 2000 Growth stock peak. This divergent performance has compressed the relative valuations between growth and value stocks to levels not seen in almost 20 years - if ever. | More |