Hi there,

Last week, we established that Macroeconomic factors appear to show a meaningful explanatory power over sectors such as Energy, Financials, and Real Estate. We concluded our analysis by noting that incorporating macro factors into the investment process shouldn’t be disruptive, but can actually be supportive. This week, we continue our examination to demonstrate how both macro & fundamental factors can indeed co-exist and provide investors a meaningful view into both how and when ‘macro matters’. We will leverage both the Axioma WW Fundamental and Axioma WW Macro Projection Models in our analysis.

Fundamental and macro-oriented strategies have traditionally been separate and distinct styles of investing. Fundamental managers take a bottoms-up approach to identify companies that they believe are poised for future success or failure while macro managers employ more of a top-down view to isolate broader economic trends and then select those stocks which stand to be most impacted.

This week we revisit a popular Factor Spotlight topic as we head into the thick of Q2 2021 earnings season. With a market bracing for a procession of earnings announcements, we will explore the various forms of crowding measures to better understand what names are most vulnerable to systematic pressures stemming from concentrated holdings across the investment management landscape. Before we dive in, we would like to offer our readers a complimentary ‘concentration’ analysis of your portfolio. To initiate a portfolio review, please register here.

The focus on improved US infrastructure has lingered at center stage this week, as the business and investment worlds continue to weigh in on the pros and cons of President Biden’s proposed $2 trillion American Jobs Plan. Though the plan has faced much criticism in Congress, there are still ambitious efforts underway to get a clean infrastructure bill passed by the end of the summer.

This past week on March 31, the Biden Administration announced the American Jobs Plan, which proposes a $2 trillion plan to invest in US infrastructure. The plan highlights several areas of public investment designed to address the climate and racial inequities that have arisen in part due to an aging national infrastructure and lack of focus on research & development. If passed, the proposed plan will result in massive investments in transportation infrastructure, clean drinking water, and sustainable housing efforts, to name a few.