Cost of capital - Lumen Global Investments

Our View towards China (A) Market – Intrinsic Value vs. Intrinsic Risk

Have you missed the strong rally in the Chinese market since Fall of 2022 and wonder if you should get it?

See our view via this Tableau viz.

We are cautious though there are specific sectors like the financials that have value.

Ranking of World Sectors Using the Residual Income Model, based on Lumen’s calculated Cost of Equity – June 2022

Global Sectors Outlook as of June 2022 using the Residual Income Model and Lumen calculated Cost of Equity

Ranking of Regional Markets Applying the Residual Income Model and the Lumen-calculated Market Implied Expected Returns/Cost of Equity (June 2022)

Selected Regional Markets Outlook as of June 2022 – Value vs. Risk

Regional Markets and US Sectors Outlook Q1 2022 – Value vs. Risk

Please check out the Intrinsic Value column for the ranking of value and the Intrinsic Risk column for the ranking of risk – based on the Residual Income Model.

Regional, Emerging, and Major Markets Investment Outlook – Value vs. Risk

Using the Lumen Global Value Compass calculated market-implied expected returns and stress-testing with the Residual Income Model, we discovered lots of value dispersion regionally and within the emerging world. Intrinsic risk is more skewed towards EM than DM.

Lumen Model Universes: Strategies Aligned with Unique Investment Goals

Lumen’s portfolio construction and asset allocation process starts with helping investors to clearly define their investment objectives, which can be mapped to a Predefined (Model) Universe, built up by factors that align with the investment strategies and investor's goal.

The New “New” Alpha

The end of a historical bond market rally will bring about yields normalization with considerable implication in the financial landscape. Active management is not over but has migrated from stock picking to active asset allocation to generate Alpha.

The 60/40 is Dead … Long Live Modern Portfolio Theory

Lumen takes a fresh look at the 60/40 asset allocation debate and revisits the meaning of the Modern Portfolio Theory. As technology continues to evolve, customization in portfolio construction, i.e., selecting the set of investment alternatives first and then optimizing, is rapidly becoming the new norm in the wealth management industry.

What’s Next in Factor-Based Investing – Lumen’s Methodology

Lumen discusses factor investing, an investment approach where stocks are selected based on quantifiable factors that drive the differences in risk or rate of return of stocks. The article describes the history of factor investing and provides insights into the use of various factors in portfolio construction and how Lumen quantifies these factors, especially the unique Economic Value Added (EVA) concept as metrics of value. We also shared some observations of the factors selected.

Our View towards China (A) Market – Intrinsic Value vs. Intrinsic Risk

Have you missed the strong rally in the Chinese market since Fall of 2022 and wonder if you should get it? See our view via this Tableau viz. We are cautious though there are specific sectors like the financials that have value. Contact us for more information.

Category: Cost of capital