Search this website. You can use fund codes to locate specific funds

Hidden factors: exploring equity market behaviour in 2020

At the beginning of a new year, it’s customary to look both back to the past and forward to the future. This year, it would be tempting to focus on a future in which the coronavirus is finally brought under control, gladly turning our backs on 2020 and consigning it to the annals of history. However, looking at the extreme market events of the past 12 months can provide some valuable insights for investors.

In this issue of Equitorial, we explore the behaviour of the markets in 2020 through the lens of investment factors, looking at how the impact of macro events affected the performance of specific factors at different times.

In particular, we’ll look at three distinct, record-breaking events: the significant outperformance of companies with strong balance sheets in March, the long summer of growth, and the value rebound prompted by the announcement of a vaccine in November. Having explained 2020 from a factor investing perspective, we’ll offer a brief outlook on potential factor performance in 2021.

More Insights

Credit Pulse: market update - 15 January 2021
How does the fixed-income team at the international business of Federated Hermes see this year shaping up?
Weekly Credit Insight
Chart of the week: fallen angels fly high
Found in space: how markets could make contact with reality in 2021
This month, Fiorino looks to the stars for an alien-eye view of Earthly financial conditions...
Global Emerging Markets: country allocation review 2021
We consider our 2021 country allocations for global emerging markets.
Global Equities case study: Vonovia
We examine the favourable ESG attributes of current holding Vonovia
Spirit of resilience: Market Risk Insights, Q4 2020
We observe financial indicators correlating with spirt of resilience demonstrated by society during the pandemic.