SSGA: What investors can learn from 2021’s most popular equity trades

SSGA: What investors can learn from 2021’s most popular equity trades

September 21, 2021

Equity
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State Street Global Advisors (SSGA) evaluates popular segments using a balanced approach to stock selection, which takes a range of key market drivers into account: value, quality, sentiment, and risk.

Olivia Engel, CIO of SSGA’s Active Quantitative Equity department, applied this approach by looking at some of the most interesting trades in 2021.

  • Emerging Market Marine Transport (One-Year Return: +215%): Our models continue to favor these stocks from a sentiment and quality perspective, with only a mild ‘yellow light’ from valuation. Market risk measures are rising, however, so we will need to monitor this one carefully.
  • World Semiconductors (One-Year Return: +62%): Our model signals continue to support an overweight, driven by highly favorable quality and sentiment scores, tempered only mildly by neutral valuation and risk metrics. Semiconductors may have some room to run, especially as Asian tech investors flee their Chinese positions.
  • Chinese Consumer Discretionary (One-Year Return: -13%): We like the China consumer growth story, but prefer names in the less crowded, small-cap segments that offer better valuation and better near-term fundamentals. These will likely face fewer administrative headwinds and may benefit from some of the ‘Made in China’ industrial policies.

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