Que Nguyen, associate and chief funding officer, fairness methods, at Analysis Associates, joined the agency in 2021 after seven years as a managing director of portfolio technique and analytics at Willett Advisors.
Nguyen leads cross-sectional fairness analysis and technique design at Analysis Associates, working with the agency’s educational advisors and with the PIMCO subadvisor’s portfolio managers. Her work helps Analysis Associates’ systematic energetic portfolios and sensible beta indexes.
Nguyen’s profession additionally contains a number of years as managing director, technique, within the College of Chicago’s funding workplace, and management posts at different monetary providers companies.
In Could, she wrote a put up on the Analysis Associates web site noting that the agency believes that generative synthetic intelligence has transformative potential and may very well be within the early phases of changing into an funding bubble.
Nguyen not too long ago responded by e mail to a number of questions from ThinkAdvisor about her market insights.
THINKADVISOR: What’s your present tackle the markets, a section or sector that you just assume is basically attention-grabbing now, and why? What does this imply by way of particular holdings?
QUE NGUYEN: U.S. exceptionalism has been the mainstay of markets in the previous couple of years, and particularly so within the know-how ecosystem. In consequence, valuation dispersion in U.S. shares are extraordinarily large. Regardless that the cap-weighted U.S. market index seems richly priced, there are a lot of attention-grabbing areas of engaging valuation.
One of the apparent is small-cap and small-cap worth shares. The S&P 500 trades at a P/E of ~25, whereas small caps commerce at ~16x. I are likely to favor energetic funds or sensible beta approaches in small cap, significantly these with a top quality element.
For instance, the small-cap fund that we subadvise at PIMCO, the Pimco RAE US Small Fund (PMJAX), explicitly takes into consideration a wide range of high quality metrics, corresponding to monetary well being, capital effectivity and profitability, in choosing corporations.
A wise beta method that we take is the Basic Index (RAFI), the place we take into consideration quality-related metrics corresponding to money circulate, dividends and buybacks in how we weight corporations. There are a few ETFs that observe the RAFI small-cap indices, together with the Schwab Basic U.S. Small Firm ETF (FNDA) and the Invesco FTSE RAFI US 1500 Small-Mid ETF (PRFZ).
What’s your greatest bullish feeling now and why?