Gavekal Capital: Internals of MSCI Asia-Pacific A Departure From QE-Driven Trends

Monday, March 17, 2014

Internals of MSCI Asia-Pacific A Departure From QE-Driven Trends

Every week we decompose the performance of every sector, region and country trying to understand the forces working beneath the surface.  The two factors with the highest correlation to MSCI Asia-Pacific last week were dividend yield and the correlation to the Yen.

Factor Score Summary
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The companies with the highest dividend yield did the best in developed Asia least week.

Factor Score Deciles
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The highest yielding sector in the MSCI Asia-Pacific index is the telecommunications sector, with a 4.2% dividend yield on average and 100% of the companies paying a dividend.

Dividend Information
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So, not surprisingly, the telecom sector was the best performer is developed Asia last week.

Performance
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During the "excitement" phase of Japanese QE last year, companies in cyclical sectors, with low/no yields were the outperformers.  Recent performance is a departure from QE-driven trends.