The coronavirus outbreak represents a significant shock to both supply and demand in China and is likely to have repercussions for both Chinese and global economic growth.
Portfolio Managers Matthew McLennan, Kimball Brooker
Global equity markets ended a robust 2019 on a high note, with a strong fourth quarter rally adding to already impressive yearto- date gains. Performance over the last several months of the year was driven mainly by sectors of the market, such as technology and health care, thought to have good long-term growth prospects.
In fixed income markets, solid fourth quarter returns capped off what was a remarkable year across the complex. As in the equity markets, the credit rally appeared buoyed by central banks’ return to highly accommodative policy, which repressed volatility and supported bond returns across the quality spectrum.
With a new year upon us, we remain in uncharted equity and economic waters. In the US, the current bull run has been the longest on record, as has the ongoing economic expansion. With unprecedented levels of global monetary stimulus, however, questions remain as to how much of the equity market’s rally over the past 10-plus years should be ascribed to central bank liquidity.
If we had to describe the fixed income market in 2019 with a single word, we would choose “complacent.” While leverage remained elevated among both non-investment grade and investment grade issuers, particularly given the age of the credit cycle, yield spreads were on the tighter end of the spectrum and absolute yields ended the year below where they had been in 2007.
The gold price continued to climb in the third quarter of 2019, reaching a six-year high of $1,552/oz. in early September, as macroeconomic and geopolitical uncertainty continued to support the appeal of perceived safe-haven assets like gold.
Renewed easing by central banks worldwide was the defining move in financial markets during 2019, instigating a robust rally that left a number of major equity indexes at or near all-time highs by
Watch Matt McLennan alongside Evercore ISI's Ed Hyman as they discuss what has changed in financial markets over the last year and what that means for the US and Global economies.
Equity markets have overcome their end-cycle anxiety to deliver impressive gains thus far in 2019. Given the magnitude of returns across stock markets globally, it is perhaps not surprising to see widespread reports of FOMO among investors.
"If you're a long-term investor, it matters less what's happening to the markets as a whole, and matters more what you can find bottom up. At the end of the day, we're not betting on being all into markets. We're selectively buying into markets around the world and I think that's the key distinction."
The use of gold as a potential hedge against extreme market outcomes has long been a key tenet of First Eagle’s investment philosophy.
At First Eagle, we’ve long held that the United States does not have a monopoly on good companies. While we think most market participants would agree with this sentiment, asset allocation data suggest US investors in general continue to be significantly underexposed to international equities relative to their share of the global opportunity set.
“One of the things that's important that we do a little bit differently at First Eagle, is we don't define value just in purely statistical terms."
Though the current business cycle—the longest in US history—is showing signs of age, the potential timing of and impetus for its end remain uncertain.
Conventional wisdom dictates that everyone should save as much as they can, as early as they can, for as long as they can in order to live a dignified life in retirement.
The long-simmering trade dispute between the US and China has intensified in recent days.
Nurtured by ever-cheaper computing power and the datafication of modern life, the rate of advancement in technologies based on artificial intelligence (AI) and offshoots like machine learning has a
It’s by design that companies in Matthew McLennan’s portfolios aren’t exactly those that set investors’ hearts racing with excitement. “We’re happy to own businesses with what we consider a gradual positive drift to them,” he says. In this article, Matthew McLennan and Kimball Brooker describe how they assess “fade risk” in a number of industries, what makes them uneasy about the state of the world today, why their exposure to gold is higher than normal, and why they see mispriced value in Fanuc, Orkla, Schlumberger, Jardine Matheson and Weyerhaeuser.
The timing and conditions of Brexit remain unclear, but most estimates suggest that both the UK and EU economies will suffer as frictions are introduced into their economic connection.
Investors and consultants frequently ask for the Global Value team’s views on sustainable investing. While we do not offer strategies that focus in this area, we do pay close attention to issues of sustainability because they may be a key to a company’s resilience over the long term. Some investors see the energy sector as the antithesis of sustainability, but we see things differently. In this interview, Benj Bahr, energy-sector analyst on the Global Value team, explains why.
In the latest video insight from The UK Investment Association, First Eagle's Matt McLennan and Kimball Brooker discuss why their focus on downside protection may help create sustainable, long-term value for investors.
First Eagle’s Global Value team has adopted the value investment philosophy first developed by Benjamin Graham and later refined by Warren Buffett.
Over the last several years, the retirement landscape has markedly changed. Americans are living longer and need to plan accordingly. At the same time, with defined contribution plans replacing defined benefit plans both at corporations and, more recently, at public entities, individuals also need to shoulder greater responsibility for their own retirement saving.
We believe that First Eagle Funds are a natural fit for defined contribution plans because we believe in the key tenets of successful retirement plan investing. Our funds have distinctive risk/reward characteristics, and they have performed well in some periods when other investments were struggling.
Since Joseph Engelberger, “the father of robotics,” developed the world’s first industrial robots in the 1950s and installed them in a General Motors plant in 1961, the robotics industry has made tremendous advances. Today, there are about 1.9 million industrial robots deployed worldwide across a wide range of applications in fields such as manufacturing, logistics, consumer services, defense and healthcare.
Rising volatility spurs many investors to sell indiscriminately and, in particular, to flee stocks they see as underperformers. This fear-driven flight may send share prices down into bargain territory, where value investors can acquire them.
Managers who are given the flexibility to go anywhere and own out-of-benchmark stocks and who make independent investment decisions, in our view, are more likely to outperform over the long term.