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.First-Quarter-2019_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.Year-End-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.Third-Quarter-2018_Investment_Commentary-1
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.Second-Quarter-2018_Investment_Commentary
The return of volatility in the first quarter provided a reality check for global equity investors—an experience we’d suggest getting used to as investors contend with an evolving fiscal and monetary policy landscape, in addition to a plethora of headline-related risks. Nonetheless, the global economic and corporate earnings backdrop still appear solid—and supportive of risk assets—over the near term. The events of the past quarter have not materially changed our longer-term asset class views or risk assessments. Consequently, our portfolio positioning has not changed.
In our first quarter investment commentary, we address the recent market volatility, then highlight a potential path for the economy and financial markets going forward.First-Quarter-2018_Investment_Commentary_General
The year 2017 was a very good one for most financial markets. While the macro outlook remains positive, unprecedented central bank policy shifts could trigger increased volatility, a stock market correction, or even a recession sometime in this business cycle. During this uncertain time, it is all the more important to stay disciplined and patient. We remain confident in our diversified portfolio positioning looking ahead over our long-term investment horizon.Year-End_2017_Investment_Commentary