Opportunistic Fund Commentary
The U.S. stock market had a tumultuous start to the year, declining as much as 12.5% before rebounding to finish the first quarter of 2022 down more than 4%. Heavily affecting the markets were: the Russian invasion of Ukraine, which reintroduced geopolitical risk for the first time in a while; the beginning of a period of investor reckoning with the Federal Reserve’s new commitment to take action to curb inflation through interest rate hikes, which could lead to economic slowing or even a recession; a clear dominance of value investing over growth, with preference for defensive stocks, and large-cap over small-cap stocks.
Positioning the Opportunistic Fund
Portfolio composition is subject to change.
The Ukraine crisis gave investors a reason to pull forward positioning they might have otherwise done later in the calendar year. This includes positioning portfolios for the late portion of the economic cycle, and seeking to reduce risk through more exposure to lower beta (less volatile) stocks and defensive stocks as growth both within and outside the U.S. is expected to slow in the coming quarters. As a result, we reduced the Fund’s net exposure to the equity market, and reduced the portfolio’s overall beta (exposure to volatility).
Why should investors consider investing in this Fund?
This fund has the ability to invest across asset classes and economic sectors as well as be flexible with market exposure. We believe these features are beneficial to clients seeking investment returns regardless of underlying financial, economic, or political environments.
Not FDIC Insured | No Guarantee | May Lose Value