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Richard Pell

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2018 Mid-Year Blog Recap

We sincerely appreciate each of you for subscribing and reading our thoughts on the market. We hope this information has been useful.

Below, we have highlighted our top 3 most popular blog posts from the first half of 2018. Enjoy!

Regards,

- The R Squared Team

Posted by Richard Pell on Jul 3, 2018 10:08:30 AM

Topics: From the Desk of Richard Pell

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Is Currency Risk Making a Comeback for International Equity Investors?

To hedge or not to hedge currency risk, that age-old question for international equity investors just keeps popping up. Admittedly, for U.S. dollar (USD) investors allocating to international equities, this has been a futile exercise as prolonged USD weakness has provided a nice tailwind to returns. However, the period from 2014 through 2016 was a wake-up call for the unhedged investor; ignoring currency risk was no longer acceptable. While international stocks performed well at the local level, currency risk devasted those returns as they were exchanged back into USD.

Posted by Richard Pell on Jun 7, 2018 7:49:28 AM

Topics: From the Desk of Richard Pell, International Equity

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Q1 Fund Flows Favor Active International Equity Strategies

Fund flows in 2017 massively favored passive investment strategies with a total of $692 billion flowing to passive funds. (Read our blog 2017 Fund Flows: Passive Trumps Active (Even In International Equity)). While international equity strategies saw positive inflows to tune of about $230 bn, actively managed funds only saw about $30 bn of positive inflows.

Posted by Richard Pell on May 17, 2018 3:31:01 PM

Topics: From the Desk of Richard Pell, International Equity

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Declining Correlations Make Case for Increasing International Equity Allocations (part 2)

Are the benefits of international equity diversification finally returning? From a performance and correlation perspective, it sure seems like a possibility.

Posted by Richard Pell on Mar 27, 2018 10:01:00 AM

Topics: International Equity

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Is International Equity Outperformance Just Beginning? (part 1)

Are you frustrated with your globally diversified equity exposure? Are you considering reducing your international equity allocation in favor of a more U.S.-centric portfolio? If so, we are here to say hold on! We totally get it, but please consider the following before hitting that sell button:

1.  Returns have begun to favor international equity over U.S. equity.

2.  Low correlations actually signal that now is time to maximize the diversification benefits of international equities.

Posted by Richard Pell on Mar 7, 2018 12:26:39 PM

Topics: International Equity

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From the Desk of Richard Pell

2017 ANNUAL LETTER 

2017 Left Us Shaking Our Heads

R Squared Capital Management celebrated its four year anniversary in May, 2017. As many of you know, our process is based on an international equity strategy that we created back in 1995 while working together at Julius Baer Investment Management. The team at R Squared utilizes both fundamental and macroeconomic analysis in our quest to correctly identify structural tailwinds and headwinds. Over the course of 20+ years, this approach has served us and our investors well. 

Posted by Richard Pell on Jan 17, 2018 8:50:13 PM

Topics: From the Desk of Richard Pell, Annual Letter

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2017 Blog Recap

Happy New Year!

We sincerely appreciate each of you for subscribing and reading our thoughts on the market. We hope this information has been useful.

Below, we have highlighted our top 3 most popular blog posts from 2017. Enjoy!

Regards,

- The R Squared Team

Posted by Richard Pell on Jan 2, 2018 4:21:34 PM

Topics: From the Desk of Richard Pell

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3 Due Diligence Questions from an RIA

In person meetings between asset managers and investors are the most engaging and energizing parts of the due diligence process. That’s why we loved hearing that an RIA we know uses these face-to-face interactions to cut right to the chase about what is important to their firm when partnering with a mutual fund company.

The RIA asks 3 key questions:

1. What makes your team different and unique?

2. What makes your strategy different and unique?

3. What is a mistake you have made while managing the strategy and what have you learned from it?

Posted by Richard Pell on Dec 6, 2017 1:19:44 PM

Topics: From the Desk of Richard Pell, Due Diligence

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How Much Longer Can Valuations Stretch?

International equity markets are having a great 2017 with many indices gaining +20% YTD. Some markets are absolutely on fire; EM Asia is up +39%, BRIC up +37% and broad EM up +32%. While this strong performance is certainly encouraging, our international equity team is a bit confused by the market’s reactions to various geopolitical events around the world. Whether it be the ongoing natural disasters or the ever-increasing political risk, the markets seem unconcerned…which is a bit concerning to us.

Consider, for example, this small sample of event risk that showed up during Q3:

Posted by Richard Pell on Nov 15, 2017 11:13:45 PM

Topics: From the Desk of Richard Pell, Commentary

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WSJ Takes Aim at Morningstar; Twitter Storm Erupts

Call it a fight. Call it a battle. Whatever you want to call it, in the world of mutual funds, a proverbial shot was fired on October 25th when the Wall Street Journal took Morningstar, Inc. to task over its fund “star” ratings. By now, we assume most advisors have read the critical piece titled “The Morningstar Mirage.” Executives from Morningstar responded with their own rebuttals; mostly acknowledging the limitations of analysis based on past performance but also defending their methodology based on the WSJ’s own analysis which actually showed that the “star” ratings did in fact tilt the odds in the investors’ favor. Which Morningstar states is the primary objective. Even Twitter got in on the debate sparking something of a mutual fund fire storm…well, really more like a sparkler, but whatever. 

Posted by Richard Pell on Nov 8, 2017 4:31:40 PM

Topics: From the Desk of Richard Pell

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