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Contributions by Katiyar Saurabh
In the second post in our series, we further probe value’s underperformance over the past decade and ask if the historic definition of value remains relevant. We specifically look at whether a company’s valuation can be enhanced by reflecting R&D investments.
Beware high dividend yield trapsOct 25, 2019 Learn More
During low interest-rate, high-volatility environments, some investors have turned to high dividend-paying stocks. However, overly simplistic approaches to selecting dividend-paying securities exposed investors to potential “yield traps.” Could these traps have been avoided?
The MSCI Adaptive Hedge IndexesMar 10, 2016 Download Document
Global equity portfolios expose investors to currency risk. Those wishing to minimize currency effects often hedge that currency exposure without touching their underlying international equity portfolios. However, currency fluctuations may also increase the investment returns and those movements can be sharp. We describe how the MSCI Adaptive Hedge Indexes use versions of four well-known currency indicators – Value, Momentum, Carry, and Volatility – to systematically determine a level of hedging for each currency exposure in the index. We also explain how the input from the four indicators has historically changed in response to volatile market conditions or a more challenging macro environment.
Research Insight - Harvesting Equity Yield: Understanding Factor InvestingDec 15, 2015 Download Document
Ever since central banks slashed interest rates in response to the Global Financial Crisis, many institutional and retail investors turned to high dividend-paying equities to meet their needs for income. However, a naïve high-yielding equity strategy can expose itself to various “yield traps,” such as those stemming from temporarily high earnings, high payouts or low stock price. We find that the yield factor has tended to perform well during a structurally low and rising interest rate regime, which could become a prevailing macroeconomic regime over the coming years as the Federal Reserve begins its rate-hiking cycle.