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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Bailard International Equity Strategy 2024 Q4 Investor Letter | Buyside Digest

Back to Fund Profile (Bailard International Equity Strategy)

Primary Source Intelligence • Q4 2024 Letter Analysis

Bailard International Equity Strategy Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Bailard International Equity Strategy. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD-6.89%

YTD+6.1%

Annualized+6.6%

Positioning StanceConstructive

GeographyGlobal

Digest Analysis

Quick Take

"Bailard's international strategy outperformed benchmarks despite currency headwinds and global political turmoil in Q4. Strong sector positioning in Communications Services and Technology, plus geographic allocation avoiding major laggards, drove relative performance."

Executive Summary

Bailard's International Equity Strategy delivered a -6.89% net return in Q4 2024, outperforming the MSCI EAFE benchmark's -8.11% decline. The quarter was marked by significant political upheaval across major democracies, including Republican victories in the US, coalition collapses in Germany and Japan, and government instability in France and South Korea. Currency weakness against the dollar was a primary headwind, with the Israeli shekel being the only currency to appreciate. Despite mixed earnings reports and Chinese economic weakness, certain sectors performed well, particularly banks anticipating higher rates and e-commerce firms reporting strong growth. The portfolio benefited from strong developed market allocation, avoiding laggards like Denmark and Australia while maintaining overweights in Communications Services and Technology. Looking ahead, the manager remains optimistic about international equities, highlighting attractive valuations with EAFE trading at a 45.7% discount to US markets. The strategy focuses on identifying global leaders with growth potential and valuation re-rating opportunities while maintaining nimble positioning across diverse global environments.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

45%

CautiousHigh

Moderate (45%)

The portfolio holds 165 positions across 19 markets, indicating broad diversification rather than concentrated conviction. While the manager expresses clear views on country and sector positioning, the large number of holdings and systematic approach suggests moderate conviction. No individual position sizes or specific conviction statements are provided.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager expresses cautious optimism about international markets, acknowledging significant headwinds from political instability and currency weakness but highlighting attractive valuations. The outlook section states they 'remain optimistic on the outlook for non-US equities' while recognizing challenges.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

Portfolio positioning shows selective risk-taking with overweights in specific countries (Germany, Japan, Singapore, Israel) and sectors (Communications Services, Technology) while maintaining underweights in others. The approach is measured rather than aggressive, with tactical adjustments based on rankings.

Capital Deployment

20%

De-riskingDeploying

De-risking (20%)

The manager made tactical adjustments during the quarter, bringing Germany from neutral to overweight, increasing Japan and Singapore positions, and adding Israel exposure. However, these were funded by reductions in Denmark and Italy, suggesting rotation rather than net deployment. Cash remains minimal at 0.5%.

Forward Guidance

20%

CautiousExpansionary

Cautious (20%)

The manager indicates continued selective deployment with focus on finding global leaders and maintaining nimble positioning. Language suggests cautious optimism about adding to positions based on fundamentals rather than aggressive deployment plans.

Language Signal

10%

BearishBullish

Bearish (10%)

Language is balanced with both risk acknowledgment (political instability, currency headwinds, economic weakness) and opportunity identification (attractive valuations, global leaders). Slightly more cautious than bullish overall with measured tone throughout.

Perceived Risk

65%

Low RiskElevated

Elevated Risk (65%)

The manager identifies multiple significant risks including political instability across major democracies, currency weakness, higher interest rate expectations, and Chinese economic weakness. These risks are discussed in detail with specific examples and implications, indicating elevated risk perception.

Opportunity Density

60%

ScarceAbundant

Selective (60%)

The manager sees selective opportunities, particularly in countries with strong value and momentum characteristics like Germany, Spain, and Hong Kong. However, they note the need for selectivity and caution in certain areas like China, suggesting moderate opportunity density rather than abundant opportunities.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

The strategy focuses on finding global leaders with potential for continued growth and valuation re-rating, suggesting a multi-year investment horizon. The systematic approach and emphasis on fundamentals over near-term catalysts indicates a longer-term perspective, though specific timeframes are not mentioned.