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Biosimilars Update: Euro Companies Vulnerable + U.S. Adoption Could Accelerate

In October, we wrote about the market opportunity in biosimilars, which are generic versions of biologic drugs, also known as biologics. Biologics are molecules made by living organisms such as humans, animals, and microorganisms, which mean they typically have a more complex molecular structure compared to conventional drugs. These drugs can treat a wide variety of diseases and potentially see greater efficacy versus other therapies.

Posted by Daeil Cha on Jun 14, 2018 9:07:14 AM

Topics: From the Desk of Daeil Cha, International Equity

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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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Increasing Probability of 5-10% Correction in International Equities

Here is some potential good news and some potential bad news. The good news – international stocks are not expected to implode anytime soon. The bad news – a correction of 5-10% seems fairly likely. This increasing probability of a near-term correction is supported by the diverging relationship between stock prices and macroeconomic data.

Posted by Luis Ahn on May 31, 2018 2:59:00 PM

Topics: From the Desk of Luis Ahn, International Equity

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GDP Lies Caught from the Skies

“How Much Should We Trust the Dictator’s GDP Estimates?” Continuing our unhealthy obsession with satellite imagery, this question is the title to an intriguing academic paper written by Luis Martinez of the University of Chicago. In this working paper, he studies the manipulation of GDP statistics by the more authoritarian regimes around the world. Cleverly, he utilizes satellite imagery to measure the level of nighttime lighting as a means of validating the reported economic numbers. Shout out to the Washington Post for bringing this to our attention.

Posted by Harry Polishook on May 24, 2018 9:13:59 AM

Topics: From the Desk of Harry Polishook

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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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Fool Me Once, Shame On You. Fool Me Twice, Shame on 3… (percent)

The market is paying close attention to a critical 3% level for U.S. 10-Year Treasury bonds, which has implications for both domestic and international securities. Excluding utilities, sectors traditionally seen as stable sources of yield have recently underperformed, including consumer staples, REITS, and telecom.

Posted by Daeil Cha on May 10, 2018 10:42:56 AM

Topics: From the Desk of Daeil Cha, International Equity

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Taper Tan-Trump

Are geopolitical risks beginning to impact stocks? While 2017 was marked by low volatility and little consideration for risk in general, the first quarter of 2018 feels different. 

Posted by Luis Ahn on May 3, 2018 9:32:39 AM

Topics: From the Desk of Luis Ahn, International Equity

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Biologics Outsourcing + Butterscotch Cookies

Imagine you have some great recipes for butterscotch cookies, and you want to start a cookie business. Yet, there are some issues. First, the price people are willing to pay for cookies is going down due to intense competition as well as scrutiny from regulators after a few greedy companies ("cookie monsters," if you will) charged exorbitantly high prices. Second, because of the competition, you'll have to spend more on research to keep your cookie line fresh (pun intended). Finally, building a cookie factory is expensive, takes years to build, and requires following many stringent regulatory standards. The thing is, cookies are still in demand and could even get more popular as better cookie recipes are developed! So what do you do?

Posted by Daeil Cha on Apr 19, 2018 3:48:12 PM

Topics: From the Desk of Daeil Cha, Biotechnology

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Oil Inventories Just Did Something Not Seen Since 1996

One of the more interesting developments in the oil markets is the fact that oil inventories have not had their seasonal build. We don’t blame you for not noticing. This news was likely drowned out by all the macro “noise” around trade wars, flattening of yield curves, rise in inflation, tax reform, new Fed Chair (hawkish or dovish?), spike in VIX, and volatility in FANG stocks. Admittedly, there is a lot of macro news to digest.

Posted by Luis Ahn on Apr 11, 2018 8:34:50 AM

Topics: oil, From the Desk of Luis Ahn, International Equity

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Cryptocurrency Hidden Risks: How Embedded Content Could Land You in Jail

Continuing with our explorations of cryptocurrencies and blockchain technologies, we highlight a fascinating risk of supporting a cryptocurrency.

Posted by Harry Polishook on Apr 4, 2018 12:10:42 PM

Topics: From the Desk of Harry Polishook

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