Category: Commentaries
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SMID Cap Growth – Q1 2023 Commentary
April 25th, 2023
As anticipated entering the year, macro-economic news continues to dominate the headlines and is driving a high level of equity market volatility. The year started off strong, extending the rebound that started in Q4 . . . until the strains from the record pace of interest rate increases finally caused something to “break”: two regional…
Small Cap Growth – Q1 2023 Commentary
April 25th, 2023
As anticipated entering the year, macro-economic news continues to dominate the headlines and is driving a high level of equity market volatility. The year started off strong, extending the rebound that started in Q4 . . . until the strains from the record pace of interest rate increases finally caused something to “break”: two regional…
ESG SMID Cap – Q1 2023 Commentary
April 25th, 2023
The Russell 2500™ index returned 3.5% in the first quarter of 2023, as strong performance in technology, industrial, and consumer stocks more than offset the impact of disruptions experienced in the banking sector. The failure of Silicon Valley Bank – the nation’s 16th largest at the time – is likely to create reverberations through the financial…
Small Cap Select SRI – Q1 2023 Commentary
April 25th, 2023
The Market In General: The market continued to experience increased volatility during the first quarter of 2023. At the outset of the year, the primary macroeconomic factors affecting the market were inflation concerns and the US Federal Reserve’s commitment to raising interest rates. As expected, the Fed implemented rate hikes, but attention soon shifted to…
Small Cap Select – Q1 2023 Commentary
April 25th, 2023
The Market In General: The market continued to experience increased volatility during the first quarter of 2023. At the outset of the year, the primary macroeconomic factors affecting the market were inflation concerns and the US Federal Reserve’s commitment to raising interest rates. As expected, the Fed implemented rate hikes, but attention soon shifted to…
Small Cap Core – Q1 2023 Commentary
April 25th, 2023
The Market While the markets were focused on how the Federal Reserve might modulate economic growth in 2023, an attack came from the blindside. An abrupt bank crisis developed, helping the Fed cool the economy without slamming on its own brakes. As we and others have described and discussed this crisis in various forums already,…
Micro Cap – Q1 2023 Commentary
April 25th, 2023
Market Review The Russell Microcap® Index declined 2.83% in the first quarter of 2023 as liquidity concerns in the regional and community bank industry drove equity valuations lower, particularly in the month of March. Microcap regional banks declined nearly 18% during March as the disruption in the industry took center stage. Seven of the 11 Russell…
Mid Cap Value – Q1 2023 Commentary
April 25th, 2023
Equity market performance was volatile throughout the first quarter of 2023, but the Russell Midcap® Value (RMV) Index ended up with a positive result, increasing 1.3%. The Kennedy Capital Mid Cap Value (MCV) composite rose 5.8% (net of fees) during the quarter, outperforming the RMV by 446 basis points. For the rolling 12-month period, the MCV…
SMID Cap Value – Q1 2023 Commentary
April 25th, 2023
Equity market performance was mixed during the first quarter of 2023. For the quarter, the Russell 2500™ Value (R25V) Index increased 1.40%, the Russell 2500™ Growth (R25G) Index was up 6.54%, and the S&P 500® Index (S&P) increased 7.46%. The Kennedy Capital Smid Cap Value (SMCV) composite rose 1.56% (net of fees) during the quarter, outperforming…
Extended Small Cap – Q1 2023 Commentary
April 25th, 2023
With seeming parallels to last year’s first quarter, the opening stanza of 2023 again heavily featured macro-driven forces resulting in a fairly volatile market, punctuated by reversals in sentiment outweighing company fundamentals. There was even a ‘surprise’ market shock partway through the quarter – the deposit pressure-led bank ‘crisis’ that hit in early March –…
Small Cap Value – Q1 2023 Commentary
April 25th, 2023
Equity market performance was mixed during the first quarter of 2023. For the quarter, the Russell 2000® Value (R2V) Index declined 0.66%, the Russell 2000® Growth (R2G) Index was up +6.07%, and the S&P® 500 Index (S&P) increased 7.46%. The Kennedy Capital Small Cap Value (SCV) composite rose 0.09% (net of fees) during the quarter, outperforming…
SMID Cap Growth – Q4 2022 Commentary
January 27th, 2023
While Q4 provided a welcome reprieve and possibly the first indication that we can begin to look forward to a market backdrop that is more constructive for individual stock-selection, as a whole 2022 was a disappointing year for investors, particularly those investing in growth-oriented strategies. Excessive inflation was the main culprit – a result of…
Small Cap Growth – Q4 2022 Commentary
January 27th, 2023
While Q4 provided a welcome reprieve and possibly the first indication that we can begin to look forward to a market backdrop that is more constructive for individual stock-selection, as a whole 2022 was a disappointing year for investors, particularly those investing in growth-oriented strategies. Excessive inflation was the main culprit – a result of…
ESG SMID Cap – Q4 2022 Commentary
January 27th, 2023
The Russell 2500™ index returned 7.4% in the fourth quarter of 2022 as optimism grew regarding a potential for a less restrictive US Federal Reserve monetary policy 2023. European demand across a broad range of industries has been more resilient than expected, and many companies are beginning to experience improvement in supply chain reliability and a…
Small Cap Select SRI – Q4 2022 Commentary
January 27th, 2023
The Market In General: US stocks finished the year on a positive note with small cap equities posting a gain in the fourth quarter. The optimism was driven by headline and core inflation beginning to trend down after a series of unwelcome upside surprises. While inflation started to move in the right direction, the US…
Small Cap Select – Q4 2022 Commentary
January 27th, 2023
The Market In General: US stocks finished the year on a positive note with small cap equities posting a gain in the fourth quarter. The optimism was driven by headline and core inflation beginning to trend down after a series of unwelcome upside surprises. While inflation started to move in the right direction, the US…
Small Cap Core – Q4 2022 Commentary
January 27th, 2023
The Market The theme has once again been the direction and tenor of inflation. The Federal Reserve is in the powerful yet tenuous position of modulating inflation while retaining some modicum of economic vitality. Management teams and their operating groups are beginning to conquer the disarray of the supply chain that reigned over 2022. Then…
Micro Cap – Q4 2022 Commentary
January 27th, 2023
Market Review The Russell Microcap® Index increased 4.72% in the fourth quarter of 2022 as markets began pricing a potential for peak inflation and slowing interest rate hikes in 2023. During fourth quarter, only one sector, consumer staples, declined in the benchmark, while the top 3 sectors – energy, materials, and industrials– all generated double-digit increases.…
All Cap Value – Q4 2022 Commentary
January 27th, 2023
After lying dormant for decades, the resurrection of high inflation during 2022 was a shock to nearly all markets from equities to bonds to cryptocurrencies to even cash. The S&P® 500, Nasdaq Composite and Russel 2000® declined 18.1%, 33.1% and 20.4%, respectively, for the year. Bonds were hit by higher interest rates as the yield on…
Mid Cap Value – Q4 2022 Commentary
January 27th, 2023
Fourth quarter 2022 equity market performance was a lone bright spot in what was a challenging year for returns across all major asset classes. For the quarter, the Russell Midcap® Value (RMV) Index rose 10.5%, and the S&P® 500 Index (S&P) increased 7.6%. In contrast, for the year, the RMV declined -12.0%, and the S&P declined…
SMID Cap Value – Q4 2022 Commentary
January 27th, 2023
Fourth quarter 2022 equity market performance was a lone bright spot in what was a challenging year for returns across all major asset classes. For the quarter, the Russell 2500™ Value (R25V) Index rose 9.21%, the Russell 2500™ Growth (R25G) Index was up 4.72%, and the S&P® 500 Index (S&P) increased 7.56%. In contrast, for the year,…
Extended Small Cap – Q4 2022 Commentary
January 27th, 2023
In many respects, and for many investors and market observers, 2022 is perhaps a year best put into the rear-view mirror; challenging absolute equity returns and little help from the fixed income side of many investment portfolios left some room to be desired. To turn the year, without our usual practice of reflecting on the…
Small Cap Value – Q4 2022 Commentary
January 27th, 2023
Fourth quarter 2022 equity market performance was a lone bright spot in what was a challenging year for returns across all major asset classes. For the quarter, the Russell 2000® Value (R2V) Index rose 8.42%, the Russell 2000® Growth (R2G) Index was up 4.13%, and the S&P® 500 Index (S&P) increased 7.56%. In contrast, for the year,…
SMID Cap Growth – Q3 2022 Commentary
October 27th, 2022
Quarter Summary: It was another difficult (and volatile) quarter for U.S. equity market returns, driven by macro factors as the peak and duration of higher interest rates continued to be debated and absorbed into both valuations and future earnings expectations. Broad inflation measures (CPI/PPI) continued to come in hot and the Federal Reserve aggressively increased…
Small Cap Select – Q3 2022 Commentary
October 27th, 2022
The Market: US equity markets experienced a volatile third quarter. Small cap stocks were up over 18% in early August only to end the quarter down more than 2%. The volatility was driven by investors’ hope that inflation had peaked, followed by the realization that prices continue to climb. Core inflation, a measure of prices…
Micro Cap – Q3 2022 Commentary
October 27th, 2022
Market Review The Russell Microcap® Index declined 0.48% in the third quarter of 2022, as US Federal Reserve rate increases and concerns regarding an impending recession remained top-of-mind for many investors. The distribution of returns by sector was significant in the quarter (a 26-percentage point spread between the best and worst), with six sectors declining by…
Small Cap Value – Q3 2022 Commentary
October 21st, 2022
US equity market performance was mixed in the third quarter of 2022, with most major market indices down low single digits on a percentage basis over the three-month period. The Russell 2000® Value (R2V) Index declined 4.61%, the Russell 2000® Growth Index was up +0.24%, and the S&P® 500 Index fell 4.88%. The quarter was a…
Extended Small Cap – Q3 2022 Commentary
October 21st, 2022
Summer quarters in the equity markets often present unique challenges, especially for small cap stocks. Over the years, we’ve observed the summertime effects of market participants looking for economic or policy direction, investors being on vacation, and lighter volumes overall which can lead to exaggerated moves in share prices. Even in relatively normal years, these…
SMID Cap Value – Q3 2022 Commentary
October 21st, 2022
US equity market performance was mixed in the third quarter of 2022, with most major market indices down low single digits on a percentage basis over the three-month period. The Russell 2500™ Value (R25V) Index declined 4.50%, the Russell 2500™ Growth Index was down 0.12%, and the S&P® 500 Index fell 4.88%. The quarter was…
Mid Cap Value – Q3 2022 Commentary
October 21st, 2022
US equity market performance was mixed in the third quarter of 2022, with most major market indices down low single digits on a percentage basis over the three-month period. The Russell Midcap® Value (RMV) Index declined -4.93%, and the S&P® 500 Index fell -4.88%. The quarter was a tale of two halves: From June 30th…
Small Cap Core – Q3 2022 Commentary
October 21st, 2022
The Market This quarter has been a downbeat one for small cap stocks and other asset classes. Small cap stocks, as measured by the Russell 2000®, have lost about 25% of their value this year. The Federal Reserve has endeavored to quell inflation after a challenging stretch. Yet, month after month in 2022, the CPI…
Small Cap Select SRI – Q3 2022 Commentary
October 21st, 2022
The Market In General: US equity markets experienced a volatile third quarter. Small cap stocks were up over 18% in early August only to end the quarter down more than 2%. The volatility was driven by investors’ hope that inflation had peaked, followed by the realization that prices continue to climb. Core inflation, a measure…
ESG SMID Cap – Q3 2022 Commentary
October 21st, 2022
The Russell 2500™ index declined nearly 2.8% in the third quarter of 2022, as a market rally early in the quarter was reversed by ongoing concerns regarding interest rate increases and the possibility of a recession in 2023. Companies with meaningful exposure to European economic conditions are beginning to experience notable demand pressure, while the bulk…
Small Cap Growth – Q3 2022 Commentary
October 21st, 2022
Quarter Summary: It was another difficult (and volatile) quarter for U.S. equity market returns, driven by macro factors as the peak and duration of higher interest rates continue to be debated and absorbed into both valuations and future earnings expectations. Broad inflation measures (CPI/PPI) continued to come in hot and the Federal Reserve aggressively increased…