Opportunistic Fund Commentary
The U.S. stock market was volatile but flat during the third quarter, as the S&P 500 Index rallied 6% during July and August but declined almost as much during September. Slowing economic growth concerns, especially on the heels of tightening regulation in China, joined U.S. policy risks (fiscal cliff, potential tax legislation, and a debt ceiling showdown ) at the top of investors’ minds. Additionally, the 10-year U.S. Treasury note’s yield increased more than 20 basis points (0.20%) during the final week of September as markets continue to try and understand how transitory existing inflationary data are.
Positioning the Opportunistic Fund
Portfolio composition is subject to change.
At a broad level, we believe the current outlook for fixed income is mixed at best. Thus, we expect to maintain a high level of exposure to equity markets in the near term. Should interest rates push meaningfully higher from current levels, we would become more constructive on bonds and look to add exposure. We believe the current early-to-mid cycle state of the economy argues for continuing to own cyclical stocks over defensive ones. Although the rate of positive change for economic data has likely peaked with the anniversary of the U.S. COVID-19 recovery - aiding year-to-year comparisons until now - we believe data can remain highly positive for the near future. As such, we continue to maintain significant exposure to cyclicals.
Why should investors consider investing in this Fund?
The 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.
An investor should consider a fund’s investment objectives, risks and charges and expenses carefully before investing or sending money This and other important information about an investment company can be found in the fund’s prospectus. To obtain a Cavanal Hill Funds prospectus or summary prospectus, please call 800-762-7085 or visit us at www.cavanalhillfunds.com. Please read it carefully before investing.
Not FDIC Insured | No Guarantee | May Lose Value