Insights

Building Climate Resilient Portfolios: Considerations for Physical Risks

October, 31 2023

Global warming pressures have overlayed an additional consideration for asset owners and managers seeking to adapt their portfolios to increased climate transition and physical risks. In this collaborative paper with Manifest Climate, LACM discusses why identifying climate risks is important, how physical risks can affect companies’ financial returns, and how its stock selection model is positioned to anticipate risks and capture opportunities posed by climate change.

Navigating Turbulent Equity Markets

April, 21 2023

This paper seeks to demonstrate that factors can provide an intuitive description of market events. Moreover, it illustrates how factor data can be used to develop an adaptive investment process that not only captures investors’ changing expectations, but also builds portfolios that have been able to weather varying and uniquely challenging market environments.

Building Better Equity Portfolios through Dynamic Factor Management

March, 31 2023

LACM’s investment philosophy is rooted in the belief that markets are dynamic and investor preferences continually evolve. In this paper, LACM seeks to illustrate how a forward-looking approach based on current risk premia can generate superior forecasts versus both static and timing approaches based on historical returns.

Reflections on 20 Years of Quantitative Investing

January, 26 2023

2022 was a milestone year for LACM, marking 20 years since its founding. The Firm has since enjoyed significant growth, while staying true to its proprietary investment philosophy and adaptive quantitative approach. In this piece, Co-CIO and Co-Founder, Hal Reynolds, reflects on LACM’s history, as well as the key insights that have supported the Firm’s dynamic approach and led to significant developments in the stock selection process.

Increasing Investment Opportunity by Lifting the Short Constraint

November, 7 2022

This paper discusses the features of short extension strategies that can help active managers buy large cap exposure in concentrated markets. Even small extensions on the short side may offer alpha capture and risk management benefits.

Emerging Market Equities, Investors Grapple With Peak Political Risk

April, 16 2024

As billions of people head to the polls in 2024, how will politics influence flows to emerging market equities? LACM’s Co-CIO, Hal Reynolds, features in an article with IPE, discussing how regulatory activity may restrict productivity growth and constitute a cap on earnings growth for emerging market companies.

NLP Can Help Identify Linkages Between Equity Market Peers

January, 15 2024

Artificial Intelligence and Machine Learning models have shown promise in improving forecasting accuracy across a wide range of problems, such as image and speech recognition, text translation, and medical diagnosis. In this feature article with IPE, LACM’s Co-CIOs, Ed Rackham and Hal Reynolds, discuss how Natural Language Processing, a subset of Machine Learning, can help to identify linkages between equity market peers.

What's Next for High Quality Growth Stocks?

November, 15 2023

The past eight years are an important reminder that the largest companies may dominate for extended periods of time, so how should investors evaluate the dominant competitive positions and fundamental momentum of these companies? In this article with P&I, Hal Reynolds, Co-CIO, and Sidharth Madan, Associate Director, Research, discuss different factors investors may focus on in their search for more consistent active returns.

Will Growth Continue to Outperform Value?

July, 25 2023

Growth beat value in the first half of 2023, but will its outperformance last? In a discussion with Institutional Investor, LACM’s Co-CIO and Co-Founder Hal Reynolds offers his thoughts on why better economic conditions are likely required for value to make a sustainable rebound.

^{Any opinions expressed in this publication are current only as of the time made and are subject to change without notice, and the Firm assumes no duty to update any such statements.}

AI in Investment & Financial Services

July, 19 2023

Co-CIO and Co-Founder of LACM Hal Reynolds spoke to the Financial Times about the outlook for the integration of AI technologies across the investment management arena. Machine learning and Natural Language Processing plays a role in LACM’s forward-looking, adaptive process, enabling the Firm to harness investors’ changing expectations as key inputs to its proprietary dynamic model.

Quarterly Model Views - 4Q23

January, 26 2024

Against the backdrop of a dovish Fed pivot, consistently strong US economic data, and decreasing probability of a severe economic contraction, LACM discusses its views and expectations entering 2024, providing insights from Los Angeles Capital's Dynamic Alpha Stock Selection Model^®.