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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Bailard International Equity Strategy 2024 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Bailard International Equity Strategy)

Primary Source Intelligence • Q2 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

Annualized+6.6%

Digest Analysis

Quick Take

"Bailard's international strategy outperformed in Q2 through strong stock selection despite election volatility and monetary policy divergence. The team added exposure to Singapore, Sweden, and China while reducing France and Australia."

Executive Summary

Bailard's International Equity Strategy outperformed during Q2 2024, returning 0.62% net versus the MSCI EAFE benchmark's -0.42%. The quarter was dominated by global elections and the beginning of a monetary loosening cycle outside the US. Elections in South Korea, South Africa, Mexico, India, and Europe created significant market volatility, with voter discontent affecting incumbent performance. The strategy benefited from strong stock selection, particularly in Health Care which gained 4.8% led by pharmaceutical names including Novo Nordisk. The manager's quantitative model emphasized value and quality metrics, leading to outperformance despite mixed sector positioning. Portfolio changes included reengaging with Singapore and adding to Sweden, Spain, and China/Hong Kong while reducing France and Australia. Looking forward, the team remains optimistic about opportunities in non-US equities, focusing on global leaders in sectors with long-term tailwinds and names where valuations appear overly pessimistic relative to fundamentals. The strategy maintains its all-weather positioning to benefit from various catalysts.

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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 strategy holds 168 positions across 23 markets, indicating broad diversification rather than concentration. While the manager expresses clear views on country and sector allocation, the large number of holdings and emphasis on model-driven selection suggests moderate rather than high conviction in individual positions.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager expresses cautious optimism about international markets, noting strong fundamentals across many foreign market segments and seeing a variety of opportunities in non-US equities. However, they acknowledge significant political and economic uncertainties from elections and monetary policy divergence.

Risk Appetite

15%

DefensiveAggressive

Defensive (15%)

The strategy made selective additions to Singapore, Sweden, Spain, and China/Hong Kong while reducing exposure to France and Australia. This represents modest rebalancing rather than aggressive risk-taking, with the manager maintaining consistent sector positioning.

Capital Deployment

10%

De-riskingDeploying

De-risking (10%)

The strategy made incremental additions to several countries and reductions in others, representing portfolio rotation rather than significant net deployment. Cash remains low at 0.8%, and the changes described appear to be rebalancing moves rather than major capital deployment.

Forward Guidance

20%

CautiousExpansionary

Cautious (20%)

The manager plans to continue focusing on fundamentals over headlines and sees opportunities in global leaders with long-term tailwinds. They express intention to position for a range of catalysts while maintaining all-weather quality, indicating selective but not aggressive deployment.

Language Signal

30%

BearishBullish

Bearish (30%)

Language includes positive terms like 'optimistic', 'opportunities', 'strong fundamentals', and 'attractive' but is balanced with acknowledgment of risks, uncertainties, and the need for selectivity. The tone is constructive but measured.

Perceived Risk

55%

Low RiskElevated

Moderate Risk (55%)

The manager acknowledges multiple risk factors including election uncertainties, monetary policy divergence, currency intervention needs, and sector-specific challenges like automobile industry weakness. While not alarmed, they demonstrate clear awareness of various macro and market risks.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

The manager sees a variety of opportunities in non-US equities across both developed and emerging markets, specifically mentioning global leaders with long-term tailwinds and names where valuations may be overly pessimistic. This suggests a reasonably rich opportunity set despite selectivity requirements.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

The strategy emphasizes fundamentals over headlines and positions for long-term tailwinds in infrastructure, automation, and technology. The all-weather positioning and focus on company fundamentals rather than near-term catalysts suggests a multi-year investment horizon, though specific timeframes are not detailed.