The past 12 months have set up a favorable environment for active small cap managers, as company-specific fundamentals were rewarded by the market. Against that backdrop, Dana’s small cap Fund has delivered. The Fund has enjoyed a strong year of relative outperformance, returning 21.11% year to date and 56.28% for the 12 months ended Sept. 30. Those returns compare favorably to its benchmark Morningstar U.S. Small Core Index, which returned 12.98% and 42.68%, respectively, over the same time frames.
Last week marked a year since U.S. stock markets reached their trough, a period that saw the S&P 500 plunge 34% in just 23 trading days, as investors absorbed the implications of a global pandemic.
With distance between those volatile days, we wanted to reflect on three major investment themes that have taken shape since then. More importantly, we wanted to share three takeaways that we hope investors will remember in the future.
Spring is in the air which means one thing, it’s time for the annual tradition of Spring Break! While fun is encouraged, we invite you to relax and dive into these 10 books recommended by the investment team at Dana.
After a pandemic-related hiatus last year, we are excited to see the return of March Madness. For millions of Americans, filling out a bracket and participating in an office or family tournament pool is another small step in a return to the normal traditions we are accustomed to.
Many of us at Dana Investments are college basketball fans, so in the spirit of the season we offer a more light-hearted market outlook, sharing how we would seed some of the forces potentially supporting – or disrupting – the economy and markets.
We hope basketball fans will enjoy.
The 1 Seeds
In a March Madness tournament, the one seeds are those tried-and-true teams you would expect to do well. They are the “base case” for market and economic outlooks. While these teams, or market forces, are supposed to carry on, there’s a hitch: If they fail to perform as expected, it could disrupt the market …or, in the case of March Madness, bust many fans’ brackets. Here are a few forces we deem as 1’s:
It’s now been a year since COVID-19 shuttered many businesses, forced stay-at-home orders for Americans, and upended every sense of normalcy. As we cross that one-year anniversary, Dana Investment CEO Mark Mirsberger reflected on the year, what it meant for asset management businesses, and what it might mean going forward.
Editor’s Note: Our technology sector outlook is part of a regular series sharing our views on various sectors. It’s part of our efforts to increase communication with investors at a time of economic and market uncertainty. While the sector outlooks provide a short overview of our thinking, we invite you to contact us if you are interested in a deeper discussion.
For much of 2020, gains in broad indices were largely concentrated, as a few mega-cap tech companies dominated performance. The FAANG stocks, or as they are grouped more recently, FAANMG (Facebook, Amazon, Apple, Netflix, Microsoft and Google) enjoyed heady returns while most other stocks trailed significantly.
True, some of these stocks fall in the consumer discretionary sector, but for all intents and purposes, they share a common thread: dominant technology platforms that individuals have relied upon heavily during the pandemic.
In 2021, opportunities in the technology sector could widen. This blog looks at a few of the additional bright spots, a few potential headwinds for pockets of the tech sector, and how we are navigating the current environment.
At Dana, we were pleased to end 2020 with some positive recognition, making Pensions & Investments’ list of best places to work for the ninth straight year. We celebrate that news, and are sharing it with our clients, for a simple reason: Culture matters.
In our view, a positive work culture doesn’t just benefit employees within a company. It also translates into a better client experience. This is likely true for any industry, but we believe it’s particularly important to asset management.
As 2021 kicks off, we wanted to share a few blog posts that could help you and your clients navigate the coming year. These were among our most read blogs of 2020, but they continue to be relevant today.
The first reflects on the extreme concentration risk within the S&P 500 index. We believe this is an issue that will bear watching in 2021. The second offers several stats aimed at keeping clients invested through a bear market. We hope it provides a timeless reference guide for any client you have who may have trouble staying the course when volatility strikes. The third offers perspective on the historical divergence between growth and value stocks in recent years, which remains a topical issue.
If there were ever a year to have a reflective conversation with clients, 2020 is it. From the virus, to market volatility to election uncertainty, the year has been filled with tensions. The end of the year provides a natural opportunity to reflect on those issues and make both a portfolio - and a client relationship - stronger.
If you’re an advisor going through year-end meetings with clients, we wanted to provide a few questions, suggestions and resources that may help your clients reflect on 2020 and stimulate deeper conversations. We know the vast majority of advisors will cover these issues in some shape or fashion, and have the pulse on their own clients more than anyone. But given how unusual 2020 has been, it never hurts to think of new ways to ask reflective questions.
In the spirit of sharing, here are a few items that may help you and your client reflect on a year of upheaval. We hope you find them useful heading into the new year:
Value stocks have quietly made a bit of a comeback in recent weeks, due in part to positive news on coronavirus vaccines, which could hold the key to opening the economy and helping many of the cyclical businesses in value indices. If this is the sign of a new turn for value, it was a long time coming.
The charts below offer perspective on just how wide the gulf between value and growth stocks has become. While we won’t try to predict whether a recent bounce by value stocks – the Russell 3000 Value Index outperformed the Russell 3000 Growth by more than 600 basis points the week ending 11/13 – we believe the wide delta in performance and valuation suggests an attractive entry point for value stocks, and a potentially long run for the investment style when it returns to favor.
The Dana Funds are distributed by Ultimus Fund Distributors, LLC. There is no affiliation between Ultimus Fund Distributors, LLC. and the firms referenced in this blog post.