Shaker Investments: Announcements, Updates, & Insights

It was a challenging quarter but the Shaker Small Cap Growth strategy rebounded well from its Covid-19 lows. In absolute terms the SCG was up 39.5% for the quarter and is up 11.47% for the year.

We are stock pickers and not traders. We try to stick to what we do best, and over the coming weeks and months we will continue to work to determine the winners and losers in order to take advantage of investment opportunities that present themselves.

The first quarter of 2020 was one of the most difficult investment quarters in the last 100 years of the US stock market.  This was due not only to the magnitude and speed of the decline in the market, but also to the rapid change in the US economy. 

The fourth quarter of 2019 was very good for the Fundamental Growth Strategy and for US equity markets as both rose high single digits on a percentage basis.  Market price-to-earnings multiples rose as investors showed a strong interest in buying US equities driven in large part by…..

The Shaker Small Cap Growth Strategy (SCG) performed well in Q4 2019 returning 11.48% (net), and slightly outperformed the Small Cap Growth Index benchmark, which returned 11.39%.  For the year, the SCG Strategy was up 33.98% compared to the Small Cap Growth Index benchmark which was up 28.48%. The SCG has now outperformed its benchmark in five consecutive quarters and ten of the last twelve quarters.

The most unanticipated occurrence in Q3 was the rotation of market leadership from growth to value.  Companies most impacted were those that had high levels of sales and earnings growth, and multiple expansion over the last year. 

During the third quarter, investment returns for the Shaker Fundamental Growth Strategy performed broadly in line with U.S. Equity Markets, which were modestly higher. We achieved these results due to alpha generated from stock selection despite market headwinds impacting our preferred segments of the markets.

The second quarter and the entire first half of 2019 was a very good start to the year for the Shaker Fundamental Growth Strategy and the entire US Stock Market. The investment results for your account were positive - in line with market indices in the second quarter and outperformed for the first six months of the year.

Stock market returns were positive in the second quarter of 2019. Adding to the gains of the first quarter, large cap stocks and large cap growth stocks in particular attained new highs. Small cap growth stocks have performed better than small cap value stocks, but small cap stocks have trailed large cap stocks and have not recovered to their prior high established last year.