First Quarter 2019 Investment Commentary

It certainly feels better to see strongly positive portfolio performance this quarter compared to the losses in the fourth quarter of 2018. The market rebound was due more to improving investor sentiment and risk appetite—caused largely by the shift in Federal Reserve monetary policy—than any meaningful improvements in underlying economic or business fundamentals.

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Year-End 2018 Investment Commentary

Across the board, it was an extremely difficult year to make money in the financial markets, with almost every asset class and financial market down for the year. The contrast with 2017’s strong market results is also striking—and serves as a useful reminder of the unpredictability of markets.

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Third Quarter 2018 Investment Commentary

In 2018, US stocks have strongly outperformed emerging-market (EM) stocks, but this kind of divergence is not unusual. Still, given the negative headlines surrounding emerging markets, we highlight several points this quarter that indicate EM stocks remain attractive and their long-term growth outlook remains intact. On the other hand, US stocks look expensive and there are reasons to think the near- and medium-term outlook for them is not so rosy. They represent a risk to our portfolios, which is why we maintain a meaningful underweight to US stocks.

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Second Quarter 2018 Investment Commentary

A confluence of factors combined to drive US equity outperformance in the second quarter. Diverging economic growth and monetary policies, along with fears of a global trade war, resulted in a jittery investment environment outside the United States, particularly in the emerging markets. In our second quarter investment commentary, we provide more detail about how we’ve incorporated some of these shorter-term risks into our outlook for emerging-market (EM) stocks, and more importantly, why we don’t believe they overwhelm the attractive fundamentals, valuations, and potential longer-term returns for EM stocks.

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