Category: Commentaries

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SMID Cap Growth – Q1 2024 Commentary

April 23rd, 2024
Equity market returns in Q1 started the year off strongly, with large capitalization stocks continuing to outperform (Russell 1000® Index +10.3% vs. Russell 2000® Index +5.2%) and growth outperforming value (Russell 2000® Growth +7.6% vs. Russell 2000® Value +2.9%). U.S. employment levels remained robust, and monthly GDP growth continued to beat expectations. With the rate of…

Small Cap Growth – Q1 2024 Commentary

April 23rd, 2024
Equity market returns in Q1 started the year off strongly, with large capitalization stocks continuing to out-perform (Russell 1000® Index +10.3% vs. Russell 2000® Index +5.2%) and growth outperforming value (Russell 2000® Growth +7.6% vs. Russell 2000® Value +2.9%). U.S. employment levels remained robust, and monthly GDP growth continued to beat expectations. With the rate of…

Micro Cap Opportunities – Q1 2024 Commentary

April 23rd, 2024
Market Review The Russell Microcap® Index increased 4.68% in the first quarter of 2024, as stable economic conditions in the U.S. and a shift in sentiment toward Health Care companies drove the index higher.  After a challenging 2023, the Health Care sector led the way in the Russell Microcap® index during the quarter, returning 14.56%. …

Small Cap Select SRI – Q1 2024 Commentary

April 23rd, 2024
The Market: Entering the year, financial markets anticipated more interest rate cuts in 2024 than what the US Federal Reserve projected during their December meeting. However, throughout the quarter, strong economic growth and employment metrics persisted, while inflation levels remained stubbornly high. The combination of robust employment data and stagnant disinflation led expectations for rate…

Small/Mid Cap Core – Q1 2024 Commentary

April 23rd, 2024
The Russell 2500™ index returned 6.92% in the first quarter of 2024, with the Industrials (+11.76%) and Energy (+11.09%) sectors leading the way.  Strength in small and midcap equities was rather broad-based, with 9 out of 11 sectors delivering positive returns (Communications Services and Real Estate were the only sectors that declined in the quarter). While…

Small Cap Value – Q1 2024 Commentary

April 23rd, 2024
Equity markets posted positive returns during the 1st quarter of 2024.  For the quarter, the Russell 2000® Value (R2V) Index increased +2.90%, and the Russell 2000® Growth (R2G) Index was up 7.58%.  The spread between large cap and small cap returns continued to widen, with the Russell 1000® Index (large) returning +10.30%, compared to the…

Small Cap Select – Q1 2024 Commentary

April 23rd, 2024
The Market: Entering the year, financial markets anticipated more interest rate cuts in 2024 than what the US Federal Reserve projected during their December meeting. However, throughout the quarter, strong economic growth and employment metrics persisted, while inflation levels remained stubbornly high. The combination of robust employment data and stagnant disinflation led expectations for rate…

Small Cap Core – Q1 2024 Commentary

April 23rd, 2024
The Market  The US Federal Reserve steered market sentiment during the first quarter of 2024. Investor focus centered on the potential for a soft economic landing, the timing of interest rate adjustments, and the health of the labor market. These factors, all intertwined, significantly influenced US equity market performance. Inflationary pressures remained a constant concern.…

Mid Cap Value – Q1 2024 Commentary

April 23rd, 2024
Equity markets posted positive returns during the 1st quarter of 2024.  The spread between large cap and small cap returns continued to widen, with the Russell 1000® Index (large) returning +10.3%, compared to the Russell 2000® (small) up +5.2%.  Not surprisingly, mid cap returns were in between, with the Russell Midcap® Value Index (RMV) posting a…

Micro Cap – Q1 2024 Commentary

April 23rd, 2024
Market Review The Russell Microcap® Index increased 4.68% in the first quarter of 2024, as stable economic conditions in the U.S. and a shift in sentiment toward Health Care companies drove the index higher.  After a challenging 2023, the Health Care sector led the way in the Russell Microcap® index during the quarter, returning 14.54%.  Within…

Extended Small Cap – Q1 2024 Commentary

April 23rd, 2024
The annual turn of the calendar, while artificial, can sometimes provide a waypoint for a change in the market’s sentiment.  Though we observed fairly significant changes as the calendar turned into 2022 and 2023, it felt much more subtle into 2024.  In our view, although the first quarter of 2024 featured a broadening out of…

ESG SMID Cap – Q1 2024 Commentary

April 23rd, 2024
The Russell 2500™ index returned 6.92% in the first quarter of 2024, with the Industrials (+11.76%) and Energy (+11.09%) sectors leading the way.  Strength in small and midcap equities was rather broad-based, with 9 out of 11 sectors delivering positive returns (Communications Services and Real Estate were the only sectors that declined in the quarter). While…

Bank Sector – Q1 2024 Commentary

April 23rd, 2024
For 1Q, the Bank Sector Strategy returned -2.38% (gross of fees) and -2.63% (net of fees) vs. the Russell 2000® Value Bank Subsector benchmark of -6.20%.  The portfolio outperformed as some of the late 2023 interest-rate-cut optimism came out of the banking sector to begin the year.  Additional performance information is included in the table below.…

SMID Cap Value – Q1 2024 Commentary

April 22nd, 2024
Equity markets posted positive returns during the 1st quarter of 2024.  For the quarter, the Russell 2500™ Value (R25V) Index increased +6.07% and the Russell 2500™ Growth (R25G) Index was up 8.51%.  The spread between large cap and small cap returns continued to widen, with the Russell 1000® Index (large) returning +10.30%, compared to the…

Bank Sector – Q4 2023 Commentary

March 5th, 2024
For 4Q, the Bank Sector Strategy returned 22.45% (gross of fees) and 22.15% (net of fees) vs. the Russell 2000® Value Index Bank Subsector benchmark of 28.63%.  The portfolio lagged as banks with higher short interest, many which we believe may be permanently impaired, outperformed.  For the full year 2023, the Bank Sector Strategy returned…

SMID Cap Growth – Q4 2023 Commentary

January 22nd, 2024
Equity markets returns in 2023 were ultimately quite constructive, but the path was very volatile and dominated by expectations for interest rates. All year long, market participants were hyper-focused on every nuanced bit of news that might indicate the future path of the Fed Funds Rate, a key macro factor that will impact the depth…

Small Cap Growth – Q4 2023 Commentary

January 22nd, 2024
Equity markets returns in 2023 were ultimately quite constructive, but the path was very volatile and dominated by expectations for interest rates. All year long, market participants were hyper-focused on every nuanced bit of news that might indicate the future path of the Fed Funds Rate, a key macro factor that will impact the depth…

ESG SMID Cap – Q4 2023 Commentary

January 22nd, 2024
The Russell 2500™ index returned 13.35% in the fourth quarter of 2023 and 17.42% for the full year.  Overall, 2023 was a volatile year for Small- and Mid-Cap US equities.  The regional banking crisis took center stage early in the year, and tightening actions from the US Federal Reserve gave way to an outlook for stable…

Small Cap Select SRI – Q4 2023 Commentary

January 22nd, 2024
The Market In General: US small-cap stocks surged in the fourth quarter of 2023 as Federal Reserve officials revised their ‘higher-for-longer’ interest rate expectations.  Prompted by sustained economic growth and robust employment data, along with continued disinflation, the Fed signaled the conclusion of its rate-hiking cycle and projected multiple rate cuts in 2024.  These shifts…

Small Cap Select – Q4 2023 Commentary

January 22nd, 2024
The Market In General: US small-cap stocks surged in the fourth quarter of 2023 as Federal Reserve officials revised their ‘higher-for-longer’ interest rate expectations.  Prompted by sustained economic growth and robust employment data, along with continued disinflation, the Fed signaled the conclusion of its rate-hiking cycle and projected multiple rate cuts in 2024.  These shifts…

Small Cap Core – Q4 2023 Commentary

January 22nd, 2024
The Market  The positive boost to the market during the fourth quarter was delivered by the Federal Reserve. Having burnished its reputation as a force of slowly measured change over recent years, the now overused term “fed pivot” quickly graced the pages of the financial press. We’ve noted the pressure the Fed has applied to…

Micro Cap Opportunities – Q4 2023 Commentary

January 22nd, 2024
Market Review The Russell Microcap® Index increased 16.06% in the fourth quarter of 2023, as investor sentiment turned toward the potential impact of interest rate cuts and slowing inflation in 2024. This dramatic change in expectations precipitated a significant rebound in every sector except for Energy during Q423, which declined 3.23% yoy due to weakening international…

Micro Cap – Q4 2023 Commentary

January 22nd, 2024
Market Review The Russell Microcap® Index increased 16.06% in the fourth quarter of 2023, as investor sentiment turned toward the potential impact of interest rate cuts and slowing inflation in 2024. This dramatic change in expectations precipitated a significant rebound in every sector except for Energy during Q424, which declined 3.23% yoy due to weakening international…

All Cap Value – Q4 2023 Commentary

January 22nd, 2024
The second half of 2023 experienced strong performance from stocks and bonds as inflation continued to cool, and the economy continued to grow. Inflation’s recent moderation has been driven by lower energy prices, improving supply chain costs and Federal Reserve tightening. Even with the sharp increase in Federal Reserve tightening, the economy has remained surprisingly…

Mid Cap Value – Q4 2023 Commentary

January 22nd, 2024
Equity markets rose sharply during the 4th quarter of 2023.  The Russell Midcap® Value (RMV) index was up 12.1%, and all indices posted strong gains.  Markets reacted positively to the Federal Reserve’s decision to hold its policy rate in the 5.25 – 5.50% range, as well as commentary from Fed Chair Jerome Powell suggesting we have…

SMID Cap Value – Q4 2023 Commentary

January 22nd, 2024
Equity markets rose sharply during the 4th quarter of 2023.  The Russell 2500™ Value (R25V) Index increased 13.76%, the Russell 2500™ Growth (R25G) Index was up 12.59%, and the S&P 500® Index (S&P) rose 11.69%.  Markets reacted positively to the Federal Reserve’s decision to hold its policy rate in the 5.25-5.50% range, as well as commentary from Fed…

Extended Small Cap – Q4 2023 Commentary

January 22nd, 2024
In many respects, the market entered 2023 at opposite conditions from its entry into 2022, particularly in terms of sentiment, expectations and economic growth or inflationary positioning.  After a difficult 2022 from a total return perspective, investors were much more cautious coming into 2023.  While there were plenty of quarter-to-quarter shifts of those sentiments, the…

Small Cap Value – Q4 2023 Commentary

January 22nd, 2024
Equity markets rose sharply during the 4th quarter of 2023.  The Russell 2000® Value (R2V) Index increased 15.26%, the Russell 2000® Growth (R2G) Index was up 12.75%, and the S&P 500® Index (S&P) rose 11.69%.  Markets reacted positively to the Federal Reserve’s decision to hold its policy rate in the 5.25-5.50% range, as well as commentary…

Micro Cap Opportunities – Q3 2023 Commentary

November 20th, 2023
Market Review The Russell Microcap® Index declined 7.93% in the third quarter of 2023, as investors focused on the risks associated with the rapid rise in interest rates.  Companies with meaningful exposure to big ticket capital projects and those with higher corporate debt levels having become increasingly out of favor.  We continue to see inventory destocking…

Micro Cap – Q3 2023 Commentary

October 23rd, 2023
Market Review The Russell Microcap® Index declined 7.93% in the third quarter of 2023, as investors focused on the risks associated with the rapid rise in interest rates.  Companies with meaningful exposure to big ticket capital projects and those with higher corporate debt levels have become increasingly out of favor.  We continue to see inventory…

SMID Cap Growth – Q3 2023 Commentary

October 23rd, 2023
Macroeconomics and interest rate levels specifically continue to dominate the factors driving equity performance. While pockets of the economy have experienced significant corrections due to normalizing consumer behavior and supply chains, overall U.S. employment levels and consumption have remained relatively steady and better than original estimates entering the year. Additionally, while the rate of inflation…

Small Cap Growth – Q3 2023 Commentary

October 23rd, 2023
Macroeconomics and interest rate levels specifically continue to dominate the factors driving equity performance. While pockets of the economy have experienced significant corrections due to normalizing consumer behavior and supply chains, overall U.S. employment levels and consumption have remained relatively steady and better than original estimates entering the year. Additionally, while the rate of inflation…

ESG SMID Cap – Q3 2023 Commentary

October 23rd, 2023
The Russell 2500™ index returned (4.78)% in the third quarter of 2023, as concerns regarding the impact of higher interest rates moved to the forefront of investor sentiment as the quarter progressed.  Companies that carry higher levels of debt moved further out of favor, and concerns about the increased cost of funding large capital projects have…

Small Cap Select SRI – Q3 2023 Commentary

October 23rd, 2023
The Market In General: The third quarter was defined by rising interest rates. Although the US Federal Reserve increased the Fed Funds rate by just 0.25%, long-dated treasury yields climbed dramatically throughout the quarter. This movement went beyond a reflection of robust economic data, which could pressure inflation upward, and accounted for the expectations set…

Small Cap Select – Q3 2023 Commentary

October 23rd, 2023
The Market In General: The third quarter was defined by rising interest rates. Although the US Federal Reserve increased the Fed Funds rate by just 0.25%, long-dated treasury yields climbed dramatically throughout the quarter. This movement went beyond a reflection of robust economic data, which could pressure inflation upward, and accounted for the expectations set…

Small Cap Core – Q3 2023 Commentary

October 23rd, 2023
The Market  Investor mentality seemed to shift during the third quarter of 2023. After the strength of the first half, wariness settled back in and led to the retracing of some investor returns.  Federal Reserve Chair Powell has been diligent in leading the battle against inflation, and he and his compatriots did not blink during…

Mid Cap Value – Q3 2023 Commentary

October 23rd, 2023
All major U.S. equity market indices posted negative returns during the 3rd quarter of 2023.  The spread between large cap and small cap returns remains historically wide.  Year-to-date, the Russell 1000® Index (large) is up +13.0%, compared to the Russell 2000 (small) up +2.5%.  The Kennedy Mid Cap Value (MCV) composite declined -4.19% (net of fees)…

SMID Cap Value – Q3 2023 Commentary

October 23rd, 2023
Equity markets posted negative returns during the 3rd quarter of 2023.  For the quarter, the Russell 2500™ Value (R25V) Index declined 3.66%, the Russell 2500™ Growth (R25G) Index was down 6.84%, and the S&P 500® Index (S&P) fell 3.27%.  The spread between large cap and small cap returns remains historically wide.  Year to date, the…

Extended Small Cap – Q3 2023 Commentary

October 23rd, 2023
At the risk of sounding like a broken record, we saw many of the same themes from the first half of the year continue to exert their influence during the third quarter of 2023.  These included overall market concerns about inflation, the path of Fed policy remaining “higher for longer” and the ongoing debate between…

Small Cap Value – Q3 2023 Commentary

October 23rd, 2023
Equity markets posted negative returns during the 3rd quarter of 2023.  For the quarter, the Russell 2000® Value (R2V) Index declined 2.96%, the Russell 2000® Growth (R2G) Index was down 7.32%, and the S&P 500® Index (S&P) fell 3.27%.  The spread between large cap and small cap returns remains historically wide.  Year to date, the…