In the market review and portfolio update for Q2 of 2021, Temple Row has asked the investment manager at Russell Investments, Stephen Doran, for the highlights of what we need to know.
Firstly, what is happening with the markets and the continued upward trends of equities? Stephen concluded that Q2 has been uniformly strong with its performance being supported by the reopening of the economy after the successful vaccine rollouts. The best performing growth assets were commodities and property followed by the defensive income assets. This quarter, all the fixed income assets have delivered positive returns with the more economically sensitive ones, such as emerging market debt and high yield being the best performing.
Next was the subject of value versus growth and the differences between these investment styles; and, most importantly, why Russell Investments’ approach seems to be persevering with value managers in the portfolios. In his own words Stephen explains the main differences between these two styles:
- Growth companies are ones where investors believe they have a material prospect for future growth. Investors normally associate the term growth with technology names.
- Value stocks are ones where investors believed they are priced below their fundamental worth.
Russell Investments are well known for diversification and their use of multi managers approach where they blend multiple active managers with differing investment styles. Therefore, they have access to managers who favour growth stocks as well as managers who favour value stocks. Diversification of approaches helps deliver a smoother investment journey for clients.
This interview concludes with Stephen answering whether Russell Investment have changed their views on the global market. He refers to the global economy as still being on track with developments such as vaccination rates climbing around the world which balance out growing concerns about rising inflation levels and their impact on the economy. Russell Investments’ stand on the pandemic recovery trade favour equities over bonds and the more cyclical value stocks over growth stocks.
Follow the link below to watch in full the short interview
*Remember, nothing in this article constitutes advice and all investments carry some level of risk.*
If you would like to have a chat and discussed any of these subjects further, please get in touch with the team.
