2021 Equity Outlook

Factor insights: Katrina Price, CAIA, Investment Director; Gregg Thomas, CFA, Director of Investment Strategy

ESG insights: Dan Pozen, Equity Portfolio Manager

Value insights: Multiple authors, noted below

EM insights: Multiple authors, noted below

Innovation insights: Mary Pryshlak, CFA, Head of Investment Research

Views expressed are those of the authors and are subject to change. Other teams may hold different views and make different investment decisions. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional or institutional investors only.


Are equity factor extremes signaling risks ahead?

History wasn’t much of a guide for anything that happened in 2020, and equity factor performance was no exception. We think the results raise questions about market expectations and valuations and have investment implications for the year ahead.

Tossing out the factor rule book

Conventional wisdom tells us that value stocks do best when markets accelerate and optimism takes hold, but that they struggle in risk-off markets. On the other hand, defensive stocks tend to benefit from the demand for stability in risk-off markets but lag when exuberant risk-taking returns. And growth stocks are expected to perform well in positively trending markets, especially when growth is scarce, but to be susceptible when market optimism is overtaken by worries about excessive valuations.

With this conventional wisdom in mind, investors may have expected the underperformance of value factors in the first quarter of 2020 (blue bars, left side of Figure 1). But they were likely disappointed by the marginal downside mitigation provided by defensive factors (yellow bars) and positively surprised by the extent to which growth factors outperformed (orange bars).

The months since have brought more unexpected results. In particular, why didn’t we see a strong reversal in value and cyclical assets after sentiment shifted and markets rebounded in the second and third quarters (right side Figure 1, left side Figure 2)? Our value factor, based on book yield, did OK in the second quarter (+7%), but it didn’t come close to making up for the first-quarter drawdown (-24%). And while we expect defensive factors to lag in a rebound, the magnitude of the lag far outweighed the limited first-quarter benefit (yellow left vs. yellow right in Figure 1). Finally, we would expect growth factors to engage in a market rebound, but the extent and consistency of the outperformance were eye opening (even given the unique nature of the sell-off in this pandemic).

By the end of the third quarter, the broad market was up a rather normal 7% for the year, but the performance spreads between segments like value and growth, financials and technology, and small cap and large cap (especially large-cap technology like the GAFAM1 stocks in the charts) were at extremes. While we acknowledge the fundamental drivers of some of these spreads (e.g., pandemic-friendly business models and low interest rates), we think there’s more to the story.



Unrealistic growth expectations and elevated “execution risk”

Our work with fundamental investors and observations on patterns in market behavior suggest that the market is pulling forward unrealistic expectations about companies’ future growth. To evaluate this hypothesis, we sought to understand what current valuations imply about expected growth. We selected a HOLT valuation metric (%Future) that uses a discounted cash flow (DCF) framework to assess the percentage of a company’s current market value that is attributable to future cash-flow generation from assets that don’t yet exist. We find this metric useful for thinking about the “execution risk” embedded in current valuations, and we can roll it up to a regional level. For example, nearly 50% of the US equity market valuation is based on expectations of future growth — a 20-year high (Figure 3, dark-blue line). Moreover, it has increased relative to Europe, which has remained much lower — about 15%, on average (light-blue line). In fact, Europe has seen no noticeable trend over the same period.


One could make the argument that either 1) US companies are better at delivering on future growth expectations, justifying the spread between the two regions, or 2) on a relative-value basis, Europe is potentially interesting, with no change in growth expectations embedded in valuations. However, the key point to us is that on the heels of the strong performance of the higher-growth areas in 2020, execution risk appears to be historically high for the US.

One might assume that large-cap US technology stocks have been driving the US number higher, but the %Future reading for the GAFAM stocks is in the 60% – 70% range, which is downright pedestrian for a growth stock. Instead, we found that the companies that have been the clear-cut “COVID winners” (e.g., web-conferencing companies benefiting from remote work/learning) have been most responsible for driving up the US line in Figure 3.1 Their %Future readings, many of which are in the 90s, suggest that a lot of their value is tied up in growth that hasn’t happened yet.

Investment implications

  • Value may include more structural losers than in the past and growth more structural winners — The pandemic acted as an accelerant for some of the fundamental trends driving the performance of growth and value. In particular, the lack of mean reversion in profitability at the company level that we’ve written about previously has shown no signs of abating. That said, we still believe there is a value premium driven by market participant behavior and that, despite all the headlines, value investing is not dead. We also believe, as we wrote in a recent paper, that there are flaws in traditional valuation multiples, given the evolving nature of corporate balance sheets, and that using a DCF valuation metric in combination with traditional multiples may provide a more nuanced view of what’s “cheap.”
  • The execution risk in US markets may be at an all-time high — Growth stocks (not GAFAM) are driving this dynamic. Despite the supportive fundamentals mentioned above, we don’t believe the “heads growth wins/tails value loses” performance is sustainable. We see the case for maintaining growth exposure but would also be wary about adding more because risk models may look at this exposure like a “free lunch” (as they did with low-volatility equities before the pandemic).

1GAFAM includes Google (Alphabet), Apple, Facebook, Amazon, and Microsoft. Securities are included for informational purposes only and are not intended to be an investment recommendation or a reflection of any particular Wellington holding.


The growing importance of ESG integration

Environmental, social, and governance (ESG) factors have historically been critical inputs into our search for durable businesses that compound value at a higher and more consistent rate than the market over time. We believe ESG integration is increasingly important to three key parts of this pursuit:

  1. Being right about the business’s value creation potential
  2. Paying a reasonable price
  3. Being willing to stick with the business during difficult times

Integrated into our process

ESG integration enhances our assessment of the risks, opportunities, influences, and impacts surrounding the businesses we evaluate. Likewise, it enables us to objectively evaluate the likelihood of a management team or board of directors enhancing or detracting from value creation for a given business.

How a company treats its employees, how much carbon is consumed or emitted through its operations or product use, or whether its executive compensation incents optimal decision making are, in our view, just as important to our financial analysis as traditional metrics like pricing power, demand growth, or cost of capital.

All of these pursuits inform our judgment of how fast a company can potentially grow earnings and dividends and, more importantly, the likely duration of its value-creation path and which factors could lead to meaningfully positive or negative deviations. Building confidence in a business’s resilience and trust in its management team are also vital to maintaining our conviction during periods of challenging performance.

The scope of our ESG conversations, resources, and data, along with greater corporate transparency have all made enormous progress over the last five years...

Evolution and improvement

Wellington has worked to develop robust ESG integration resources, increasing our bench of dedicated ESG specialists, enhancing frameworks for evaluation, integrating ESG scores from our internal analysts as well as external rating agencies, hosting ESG-focused calls with management teams and boards, and offering custom portfolio-level ESG reporting.

Our conversations with companies around these issues have become more informative and productive in recent years. At the same time, our ability to assess and analyze what we learn during these engagements has improved dramatically. The market demands far more transparency and accountability than it did just five years ago. Notably, because we now have some baseline to compare best practices across and within industries, companies also tend to be more receptive when we share our assessment with them.

ESG integration in practice

Like many areas of company analysis and investing, ESG integration is a blend of art and science. While some investors may be frustrated by the frequent lack of standard data, we find the potential for inefficiencies exciting. As active investors, we see these inefficiencies as opportunities to add value. Significantly, many ESG issues are multidimensional and require thoughtful analysis to assess their material effect on the investment opportunity. Below are a few examples of situations where ESG issues have been front and center in our investment debate.

A supplier of communication equipment, infrastructure, software, and services to police departments in the US and around the world — As police forces in the US face intense scrutiny and debate, we’re asking ourselves several questions that could affect this company: What role do its products and services play in police actions and their relationships with the communities they serve? Will funding for police departments be impacted short and/or long term by the current environment? Is there an opportunity for its products and services to play a role in mitigating/improving the current state of affairs? These issues raise hard questions with no easy answers.

A large global manufacturer of aluminum beverage cans — Aluminum is a decidedly more environmentally friendly package than plastic. Amid surging global interest in sustainability, demand for this firm’s products is stronger than ever, driving its valuation higher. When discussing this company, we ask ourselves the following: Are other low-impact packaging solutions likely to displace aluminum over time? What cost difference will consumers be willing to bear in the switch from plastic? If consumers are ultimately indifferent to packaging material, how does that affect the company’s addressable market? What valuation premium are we willing to pay for the firm’s ESG advantage?

A large Canadian property and casualty insurer — This company insures its customers against losses from damage of all sorts, including from extreme weather events. We ask ourselves the following: Does climate change pose a structural threat to the insurance industry in Canada by increasing the likelihood of damaging heat, wildfires, or droughts? Can this firm evolve its business models sufficiently to mitigate these threats? How are they preparing for a changing regulatory and ratings environment? How might the long-term economics of the property and casualty (P&C) industry evolve in light of these factors?

Bottom line

For every company we consider investing in, we collaborate with members of our ESG Research Team to evaluate its ESG practices and benchmark them versus competitors and reasonable standards. We then engage with its management teams and boards to hear their perspectives, share our views, and hopefully work toward better outcomes for shareholders and all other stakeholders. We integrate this information into investment decisions that we believe will result in the best long-term outcome for our clients.

The scope of our ESG conversations, resources, and data, along with greater corporate transparency have all made enormous progress over the last five years, and we expect those trends to continue. As we seek to be right about an issuer’s value-creation potential, pay a reasonable price for its equity, and retain our investment conviction, ESG integration will continue to be a critical input into those efforts. 


Perspectives on value

As we look to 2021, value investing is top of mind for many investors amid today’s rapidly evolving environment. Here, we share views on value from traditional and contrarian investors, as well as highlight quality as a complement for value.

Rich Hoffman on a shift toward value

Many value investors are seeing growing reasons for optimism as the extreme valuation spreads that persisted for some time are potentially set to wane. We believe this is thanks to a confluence of dynamics that could increase investors’ appetite for opportunities beyond the previous leadership groups. In our view, there is a compelling argument for the investment environment to become increasingly supportive of the value category over the course of 2021. In addition, we think this scenario would be more conducive for active managers seeking to outperform value universes.

In the recent low growth, low interest-rate environment, companies delivering higher growth (or offering the promise of outsized future growth) attracted a disproportionate amount of capital. This resulted in extreme valuations relative to companies with average growth. However, when investors begin to envision paths for growth to broaden out across the economy, we expect capital flows should also broaden to capitalize on extreme valuation discounts in segments where growth had previously been moderate but is set to improve. In our view, this dynamic should favor value opportunities.

Underlying economic fundamentals have already started improving ahead of expectations and, with continued progress on vaccines and treatments for COVID-19, we anticipate further economic improvements are highly likely. As vaccines facilitate a return to normal activity, the COVID losers may be the first to benefit, but we believe the benefits ultimately will be much more expansive. Combined with a backdrop of central banks actively striving to stoke inflation higher and the expectation of a potentially US$1.0 trillion stimulative infrastructure program in the US by the new presidential administration, we believe these factors should fuel meaningful tailwinds for broadening growth.

On the flip side, we think pressures that have kept a lid on valuations in several segments likely should resolve in this scenario. For example, the US defense budget is now expected to remain intact or increase, and the once-feared drastic overhauls to government medical-care options are no longer considered likely. Together, these potential tailwinds and diminished headwinds could produce higher and broader growth and, eventually, inflation and higher rates. This could begin the global economy’s transition out of the low-growth, low-rate environment, and set the stage for new leadership to emerge from areas that have been overlooked and undervalued in recent years.

Wellington’s value-oriented investors have highlighted companies across a wide range of industries and market caps that we believe could benefit in this scenario, including banks, life insurance, health care providers, pharmaceuticals, defense contractors, transportation & logistics, consumer-related travel, and portions of the auto-supply chain. Other segments where we see similarly interesting opportunities include food supply & services, consumer retailers, some REIT subsectors, and large swaths of the industrials and materials sectors. Regionally, many of our value investors are finding increasing opportunities within developed Europe, Japan, emerging Asia, China, the UK, and pockets within the US.

While discounts for value opportunities remain deep, optimism for capturing this value is increasingly high, thanks to several positive trends that may come together in 2021.

Andrew Corry and Jim Shakin on contrarian value opportunities

Today, we are finding opportunities outside the US that are at valuation extremes. Many of these firms are sensitive to the economic cycle and are weighed down by concerns that COVID-19 will persist, unemployment will remain high, interest rates and inflation will stay low, and/or dividends will not be restored in certain sectors. Given how poor sentiment is, positive news on these issues can provide much-needed reprieve to these stocks. Ultimately, we believe relative price follows relative earnings and, for many of these stocks, prices have dramatically underperformed earnings. We therefore expect a recovery in prices and, in particular, see opportunities in energy, banks, and other cyclicals.

Energy There has been a significant disconnect between the forward oil price and relative stock performance over the past six months. While puzzling, we continue to watch three things closely — free cash flow, balance sheets, and ESG progress. First, many energy companies have adjusted capital expenditures and continue to generate positive free cash flow yields of 10 – 15%.1 Second, despite depressed valuations, many balance sheets remain strong with ratings of A- or above and relatively stable Credit Default Spreads. Lastly, we believe the cloud cast by the long-term decline in oil demand from climate change will get smaller as the European energy companies have the resources to adapt. They’re already making progress with concrete plans to lower emissions and invest in renewable energy.  

Banks — Banks went into the COVID-19 crisis at absolute and relative valuation lows. Since then, we have seen estimates cut due to concerns about “lower-for-longer” interest rates and higher costs from a negative credit cycle. The typical bank has seen a 20% estimate cut in both pre-provision profits and net income, but the average bank stock is down a lot more than that in absolute terms.2 Meanwhile, the balance sheets of many banks remain intact, and given valuations are now even more depressed, any improvement in sentiment from signs of higher inflation, interest rates, or a resumption in dividends could provide significant upside potential.  

Cyclicals — We continue to see opportunities in cyclicals such as truck and auto makers, aerospace and defense, staffing and insurance, and building materials, among others. We focus on understanding each company’s post-COVID “new normal” profits, time frame to get to “normal,” and future balance sheets. We believe many of these companies can return to a similar pre-COVID level of profitability with limited balance-sheet impact, albeit over a slightly longer time frame. Therefore, we think valuations are too cheap with significant upside potential.

Peter Fisher on quality as a complement for value

Given the extreme recent performance gap between growth stocks and value stocks, many asset owners are considering diversifying their holdings away from growth and into value. At first glance, this seems reasonable as large performance differences and valuation spreads between growth and value have historically tended to mean revert and narrow. The expectation appears to be that when growth trades off, then value could rally.

But what may get lost in this “growth versus value” comparison is that there is another alternative for diversification: quality and defensive stocks. These factors have recently outperformed value while lagging growth (Figure 1). Notably, we believe they offer distinct characteristics and can thus add significant diversification potential to allocations that traditionally focus on blending growth and value. In particular, quality and defensive stocks have historically provided stronger downside mitigation on average than either growth or value over the last 20 years, which included six major market drawdowns.3

Furthermore, asset owners may find that simply shifting growth holdings into value holdings could have unintended impacts on their expected return. For instance, we think this could add a more pro-cyclical bias than they might desire and can increase particular sector biases. Asset owners who view allocation as a seesaw between growth and value may be surprised in markets where both sides are down. We believe allocations to quality and defensive factors can provide an element of stability and also potentially mitigate biases and help investors maintain more balanced and neutral positioning.


Equity Outlook - 2020 factor dynamics: First half

1Wellington estimates as of 30 September 2020. These figures are versus the market at ~4% and are looking out to 2021/22, assuming US$45 oil. | 2Wellington estimates as of 31 October 2020. | 3As of 31 October 2020. Data sourced from the MSCI World quality, value, and growth indices. Drawdowns include the technology bubble, global financial crisis, European debt crisis, 2016 and 2018 drawdowns, and the coronavirus pandemic.


EMs: With great challenges come great opportunities

The developing world was the epicenter of the COVID-19 outbreak earlier this year, so it is ironic in a sense that we now see emerging markets (EMs) as such a rich source of COVID-related investment opportunities. From health and wellness to climate change and more, the unprecedented global health crisis has spawned or accelerated compelling investable themes across a range of EM countries.

Liliana Dearth on health and wellness in China

We are seeing individuals across developing countries being more proactive regarding health and wellness. With greater availability of information, individuals are empowered to search for their own answers, compare various options, and pursue better overall health care. This trend is reshaping traditional approaches and fueling rising demand for higher-quality services.

This resounding desire was evident on our last grassroots research trip to China in late 2019, where we conducted focus groups, in-home interviews, and surveys with consumers to understand their needs and aspirations in this area. The Chinese government is actively supporting this goal by reallocating resources across higher- and lower-tier hospitals. When we translate these insights into investment ideas, we have targeted companies involved in diagnostic testing, including medical equipment manufacturers and independent clinical laboratories, which we think should benefit from increased outsourcing by hospitals.

On a similar note, we’ve also seen a greater emphasis on premiumization among Chinese consumers, particularly concerning food staples and food safety. Before COVID-19, we saw consumers in lower-tier cities begin to move away from wet markets to modern trade, following a corresponding shift within higher-tier cities over the past decade. As incomes rise, there’s an increased awareness of food safety and the risks associated with lower-quality suppliers. This is driving the growth of premium staples and reputable brands and contributing to the consolidation and formalization of restaurant chains. Related investment ideas include a private food-testing company and a leading maker of premium condiments.

We were focused on both of these themes well before the COVID-19 outbreak, with an eye toward identifying multiyear opportunities with a long runway for growth. The pandemic has since accelerated these trends, which we continue to find compelling and show no sign of abating anytime soon.

Dáire Dunne on opportunities tied to climate change

As one industry conference participant recently put it: “COVID-19 is like watching climate change in fast forward.” This is particularly relevant to any discussion of EMs these days, because a common refrain among longer-term investors is that many EMs are (or will be) on the front lines of climate change. They are likely to face challenges that could hamper economic development, potentially jeopardizing both human health and capital assets.

It is therefore important to think about the impacts of both physical risks — extreme heat, droughts, supernormal rain events, water scarcity, and poor air quality — and transition risks, such as changing policies and regulations, on different EM countries and sectors.

In addition to these risks, we believe there will also be opportunities for active managers. For example, if living and working conditions get more difficult due to hotter temperatures, air conditioning may become a necessity in many EMs. Given current low penetration rates, we anticipate that household and business demand for cooling systems should increase. White goods and industrial cooling companies that can provide affordable, energy-efficient products may benefit, as might suppliers of installed solar-generated cooling systems, low-emissivity windows, and other building products.

One company in our opportunity set develops community-wide, underground cooling systems called “district cooling.” According to the company, around 70% of the energy consumed in the Middle East during the summer goes toward cooling. District cooling has been found to be more energy-efficient and cost-effective, while producing fewer carbon emissions than traditional cooling. With the Middle East very reliant on fossil fuels, lowering the region’s energy requirements would likely have a material positive impact. The company estimates that the CO2 savings from its systems are equivalent to taking 260,000 cars off the road each year.

Bo Meunier on post-COVID China

China’s aggressive efforts to control the COVID-19 virus in the early days of the crisis were scrutinized, but the heavy-handed approach paved the way for a largely COVID-free China in the second half of this year.

2020 has been a turbulent year for China equity investing. We began the year on a cautious note, as COVID-related news was sparse, and uncertainty elevated at the time. Naturally, we saw many Chinese stocks as being quite vulnerable to a much weaker travel environment. Within our opportunity set, we sought to assess each company’s ability to survive a period of potentially extended lockdown and sluggish economic activity.

By the second quarter, we saw early signs of economic recovery, notably in the areas of domestic travel and consumption. Accordingly, we began to favor companies with high-quality assets and management teams within the consumption space, including automobiles, airports, casinos, hotel chains, and duty-free store operators. Many of these companies (and their stock prices) have since benefited from the resurgence of Chinese consumption and local travel, which we expect to remain resilient going forward.

In addition, we saw many potential winners in the technology sector. For example, due to COVID, the Chinese population became very dependent on mobile devices to work and play. Even before the pandemic, we saw opportunity in music streaming services on the thesis that subscription growth was likely over the long term, but this trend was accelerated as the crisis forced users to stay home.

Chinese demand for work-from-home capabilities also took off as the worsening pandemic led companies to increase investments in remote technology and software tools. As demand rose, so did share prices of enterprise resource planning and cloud-based computing companies. We believe software firms can continue to grow faster than the overall economy.

Greg Mattiko on travel and tourism

When the pandemic struck, our first task was to dust off our playbook from the 2008 credit crunch, focusing initially on stress testing firms’ balance sheets and cash flows. A few months into COVID-19, we conducted further stress testing, this time emphasizing profit and loss accounts. We slashed assumptions on revenue growth and profit margins for both 2020 and 2021 to ensure companies had enough valuation upside in case COVID’s economic impact lasts beyond 2020. Indeed, valuation is our true north.

By applying this approach, we sought to add to opportunities that exhibited the following traits:

  • Share price that lagged during the market rebound
  • Reasonable valuation level, with promising upside potential
  • Sound balance sheet to weather prolonged economic challenges
  • Potential to emerge stronger on the other side of the crisis
  • High-quality management team

One area where we’ve identified such opportunities is the travel industry. Virtually every company in this industry — from airports and casinos, to travel websites — had been beaten down amid the COVID-induced economic shutdowns and uncertainty around when global travel might resume. We believe this remains an industry with a powerful structural growth tailwind that will eventually return.

In the meantime, we suggest investors apply a long-term time horizon in seeking to capitalize on EM travel stocks that exhibit the above characteristics. For example, we believe airports in Thailand, Mexico, and China are worth considering, especially those likely to benefit from domestic travel in the short term and international travel over the medium to longer term. Similarly, casinos in Macau may be poised to benefit from near-term resumption of domestic travel within China, as well as longer-term growth in Chinese consumer spending.


Harnessing disruption: Highly investable innovations

The widespread disruption fueled by the coronavirus pandemic is accelerating many of our global industry analysts’ most compelling innovation-driven themes, several of which were well underway. Digitization, the shift to the cloud, enhanced work-from-home capabilities, online education, telemedicine, fintech, and ecommerce/delivery are all bolstered by the current environment. With this backdrop, it should come as no surprise that innovation continues to be among the most present themes across our deep industry experts’ research. In our analysts’ view, there are abundant opportunities to invest in the innovative companies providing these tools and services. We believe many have improved their competitive positioning throughout the crisis and are poised to take a disproportionate amount of market share.

Technology-driven progress

Artificial intelligence (AI), machine learning, the Internet of Things (IoT), and the cloud are among the technologies primed to disrupt every segment of the economy. Innovations like these are already fueling the growth of automation in our homes, automobiles, infrastructure, and myriad business applications from the office to the factory floor. It’s clear that faster computation, pervasive technology, and the explosion of data are all improving the business models of the companies that integrate these advancements. 

Over the next several years, we will continue to see large innovation-driven cycles play out...

Health care innovation

COVID-19 has highlighted the incredible importance of health care to both the individual and the economy. Beyond the pandemic, we see many exciting long-term opportunities in the sector. Our health care experts continue to identify groundbreaking innovations and are excited about the potential for the persistent development of drugs that will help address some of the world’s largest forms of sickness. They are also encouraged by the innovative efforts in new surgical methods and genetics-based diagnostic testing that could drastically improve quality of life and materially reduce health care costs.

2021 and beyond

Over the next several years, we will continue to see large innovation-driven cycles play out, including 5G wireless network infrastructure, AI, IoT, clean energy technologies, and the continued digitization of money. These are among many highly investable themes powered by enduring disruption and progress. Our global industry analysts believe these trends will transform the global economy and continue to offer countless investment opportunities along the way.

about the authors

Katrina Price headshot
Katrina Price headshot

Katrina Price, CAIA

Investment Director, Boston

As an investment director in Investment Products and Strategies, Kat works closely with investors to help ensure the integrity of their investment approaches. This includes meeting regularly with the teams and overseeing portfolio positioning, performance, and risk exposures. She contributes to developing new products and client solutions, and helps to manage business issues such as capacity, fees, and guidelines. She also meets with clients, prospects, and consultants to communicate investment philosophy, strategy, positioning, and performance.

Gregg Thomas

Gregg Thomas, CFA

Director of Investment Strategy, Boston

As director of Investment Strategy, Gregg leads our Manager Research and Fundamental Factor Platform investment teams. These teams conduct original research on factor investing, risk management, manager evaluation, analytical systems, and portfolio construction.  Their mission is to be a trusted partner to the firm’s clients by conducting independent manager and factor research, creating innovative strategies to solve client challenges, advising clients on opportunities and risks in their portfolios, or directly generating investment performance through solutions to meet client-directed objectives.

Daniel Pozen
Daniel Pozen

Dan Pozen

Equity Portfolio Manager, Boston

Dan is a portfolio manager on the Quality Equity Team. As portfolio manager, he manages equity assets on behalf of our clients, drawing on research from Wellington Management’s global industry analysts, equity portfolio managers, and team analysts.

Richard Hoffman
Richard Hoffman

Rich Hoffman

Investment Director, Radnor, PA

As an investment director in Investment Products and Strategies, Rich works closely with equity investors in his coverage to help ensure the integrity of their respective investment approaches. This includes meeting with the teams on a regular basis and overseeing portfolio positioning, performance, and risk exposures, as well as developing new products and client solutions and managing business issues such as capacity, fees, and guidelines. He also meets with clients, prospects, and consultants to communicate our investment philosophy, strategy, positioning, and performance.


Andrew Corry
Andrew Corry

Andrew Corry, CFA

Equity Portfolio Manager, Boston

Andrew is an equity portfolio manager on the International Contrarian Value Team. He manages equity assets on behalf of our clients, drawing on research from Wellington Management’s global industry analysts, equity portfolio managers, and team analysts. He currently manages several non-US contrarian value approaches along with Jim Shakin. 


Jim Shakin
Jim Shakin

Jim Shakin, CFA

Equity Portfolio Manager, Boston

Jim is an equity portfolio manager on the International Contrarian Value Team. He manages equity assets on behalf of our clients, drawing on research from Wellington Management’s global industry analysts, equity portfolio managers, and team analysts. He currently manages several non-US contrarian value approaches along with Andrew Corry.

Peter Fisher
Peter Fisher

Peter Fisher

Equity Portfolio Manager, Boston

Peter is a portfolio manager on the Dividend Growth Team. He manages equity assets on behalf of our clients, drawing on research from Wellington Management’s global industry analysts, equity portfolio managers, and team analysts. He works closely with Don Kilbride on dividend growth approaches.


Graham Proud
Graham Proud

Graham Proud

Investment Director, Boston

Graham Proud is an investment director in the Investment Products and Fund Strategies Group. Here, he shares insights from four emerging markets portfolio managers: Liliana Dearth, Dáire Dunne, Bo Meunier, and Greg Mattiko. These include grassroots, thematic, China-focused, and on-the-ground perspectives on emerging markets. Read their full EM piece linked below for more details.


Mary Pryshlak
Mary Pryshlak

Mary Pryshlak, CFA

Head of Investment Research, Boston

Mary is the director of Global Industry Research, an investment group comprising fundamentally focused equity and credit analysts as well as the various functions that support bottom-up research, security selection, and investments across global capital markets. In this role, she focuses on ensuring that we attract, retain, and motivate world-class securities analysts and investment talent; provide them with the resources, support, and ongoing feedback needed to excel; and undertake our work with a fiduciary mind-set and a collaborative spirit in order to make informed investment decisions on behalf of our clients. 



EMs: With great challenges come great opportunities
From health and wellness to climate change and more, the COVID-19 crisis has spawned or accelerated compelling investable themes across a range of EM countries. Against that backdrop, four of Wellington’s EM equity portfolio managers share their latest insights.
October 2020
EMs: With great challenges come great opportunities
Tracking the green transition in emerging markets
COVID-19 has ratcheted up environmental debates across emerging markets and highlighted the intersection of those concerns with local supply chains and infrastructure gaps. Equity Portfolio Manager Liliana Castillo Dearth looks at China as a case study.
October 2020
Tracking the green transition in emerging markets
Allocating to China — a deeper dive by asset class
Learn why we believe there is a strong case for increasing allocations to China across multiple asset classes.
October 2020
Allocating to China — a deeper dive by asset class
Climate change and emerging markets: assessing opportunities and challenges
Emerging markets are on the front lines of climate change. Aware of the challenges, many EM companies are developing solutions, shifting business models and realigning corporate policies to help them prepare. Two of our EM portfolio managers share insights on the investing landscape and offer a framework for incorporating climate-related themes into a portfolio.
September 2020
Climate change and emerging markets: assessing opportunities and challenges
Will non-US value ever outperform? A contrarian value perspective
The valuation gap between growth and value stocks has reached new extremes. What will it take for value to finally bounce back? Two of our senior contrarian investors offer their take on international markets, including thoughts on traditional value sectors, such as energy and financials.
August 2020
Will non-US value ever outperform? A contrarian value perspective
Fintech beyond the pandemic: Q&A
In this Q&A, we explore the impact of COVID-19, the latest opportunities in fintech and the sector’s long-term tailwinds.
August 2020
Fintech beyond the pandemic: Q&A
US-China frictions: reading between the headlines
We highlight the escalating conflict between the US and China and discuss potential investment implications.
August 2020
US-China frictions: reading between the headlines
Investment bytes — Asia tech
July 2020
Investment bytes — Asia tech

This is an excerpt from our 2021 Investment Outlook, in which specialists from across our investment platform share insights on the economic and market forces that we expect to influence portfolios in the year to come.