Asset Management Investor Resources

While small and mid cap valuations continue to look historically attractive relative to U.S. large cap, our latest Equity iQ addresses two important risk considerations for investors contemplating tactical shifts within their equity portfolios. 

While inflation and macroeconomic uncertainty have made the current cycle unique, our latest Chart iQ looks back to the end of prior Federal Reserve hiking cycles for hints on the potential direction of yields from here.

In our latest Equity iQ, Bryan Andress, CFA and Landon Peterson examine the relationship between interest rates and equity valuation.  By dissecting changes in the stock market P/E multiple, their analysis identifies the impact of interest rates while also shedding light on how other factors have influenced equity valuations in recent years.

Over the last six months, there has been a notable divergence between the “Establishment” and “Household” employment surveys – two important measures of labor market health.  In our latest Bond iQ, Kristen Rettig, CFA summarizes these differences and explains that recent data suggests revisions may play a key role in the future alignment of these two labor market estimates.

While cash has been a beneficial allocation for lower-risk assets in recent years, with the Fed now openly communicating about the timing for potential rate cuts, this dynamic may soon change. In our most recent Bond iQ, Brandon Zureick and Landon Peterson suggest that investors holding excess cash in portfolios should consider moving into short duration fixed income and demonstrate the value it can add over time.

A focus on investing in quality companies sounds good, but what does that actually mean in practice?  In this paper, Managing Director of Research & Senior Portfolio Manager Brian Kute, CFA, Lead PM on Johnson’s SMID Cap Core strategy and the Johnson Opportunity Fund (JOPPX), defines what quality means for Johnson Asset Management and explains how our research team identifies high-quality companies in the SMID Cap space.  He also demonstrates that a focus on high-quality stocks has historically provided long-term outperformance with downside protection and reduced volatility.

Within the domestic equity market, both small and mid cap stocks look attractive relative to large caps when compared on a valuation basis.  Our latest Chart iQ installment illustrates a simple framework we use to make this comparison.

Over the past 15+ years, the number of unprofitable companies within the U.S. equity universe has been on the rise, particularly within small and mid cap. In our inaugural EquityiQ, Brian Kute discusses the causes of this increase and compares the return and risk characteristics of these unprofitable companies to their profitable peers.

With the strong relative performance of large cap stocks in recent years, as well as the academic basis often cited in support of small cap performance, it may surprise some allocators that mid cap stocks have been the best performing domestic equity market cap segment over the past 40+ years.  In this month’s Chart iQ, Landon Peterson observes this strong long-term performance and offers a few reasons why mid cap stocks make up an equity market sweet spot.

The Fed unanimously decided to pause the hiking campaign at their June meeting. This left many investors wondering if we have reached the terminal rate, or if this was just a skip on the way to additional rate hikes. Ultimately, it is our belief that the Fed is nearing the end of the tightening cycle and going forward, the dominant factor in interest rate valuation will be the timing and magnitude of rate cuts.

In the midst of this aggressive Federal Reserve rate hike cycle, questions around the effects of tighter financial conditions loom large over the economy.

In this month’s “BondiQ”, we explore the relationship between credit spreads and two important economic variables in an effort to assess the implied fair value of credit spreads.