Economies worldwide have proved resilient in the face of stubbornly high inflation and monetary tightening, and equities were rewarded with strong returns in the first quarter of 2023. Heightened concern over banks’ stability held back the financial sector, but elsewhere the rebound begun in the fourth quarter of 2022 remained in full swing. Europe’s momentum continued, backed by exports to a re-opening China and ever-cheaper energy; the Eurozone is increasing in the strategy’s model rankings and positioning. Despite Information Technology’s preponderance in the US and market leadership for the quarter, overseas markets kept pace, supported by modest strength in currencies such as the euro and pound, and company fundamentals within sectors. We believe that this latter source of strength—resiliency of earnings and convergence of multiples towards levels seen in US peers—will prove a long-term tailwind for international equities’ performance.
Recent Insights
Country Indices Flash Report – April 2025
U.S. policy and global equities swung wildly during the month as ‘Liberation Day’ was followed by a 90-day pause in many tariffs and the administration’s harsh tone toward Fed Chair Jerome Powell softened. These America-centered policy shocks led to broad dollar weakness: the euro and pound reached three-year highs. EAFE had declined more than 10% before fully recovering, ending April in positive territory.
April 30, 2025
Quarterly International Equity Strategy Q1 2025
Non-US assets found renewed vigor to begin 2025, in sharp contrast to late 2024. Echoing the first Trump administration eight years ago, U.S. policy uncertainty weighed on the dollar and U.S. equities, while stimulus and reform improved sentiment elsewhere (the Eurozone in particular). The resulting spread of MSCI EAFE over MSCI USA was the widest first-quarter return differential since 1986. While reduced policy visibility may dampen real investment and activity across many countries and industries in the short-term, we believe recent volatility may provoke broader re-examination of allocation to non-US equities, and a constructive starting point for longer-term performance.
April 28, 2025
Quarterly Technology Equity Strategy Q1 2025
The Bailard Technology Strategy posted a 1Q25 total return of -9.35% net of fees—ahead of both the benchmark index (S&P North American Technology Index) and the competitor-comprised benchmarks. The Morningstar U.S. Open End Technology Category returned -9.98% and the Lipper Science and Technology Fund Index returned -10.88%, while the S&P North American Technology Index returned -11.43%. Over longer time periods of 3, 5, and 10 years, the Strategy’s net returns continued to lead the competitor’s peer benchmarks—quite substantially, as seen in the table to the right.
Despite market volatility in Q1, we have not significantly altered our positioning. Our view is that nothing is broken in tech, and we remain convicted in our investment process. With prices and valuation changing dramatically, we expect to optimize our positioning by bolstering or adding high-quality companies trading at attractive discounts to long-term value. We anticipate stabilization in industry fundamentals and fiscal policy in the latter part of this year.
April 16, 2025
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