We’d like to update you on some modifications to the equity portion of your account. These changes will slightly adjust the weighing of the portfolio to an over-weight in Value and Large Cap. You will see these trades occurring over the next few days.
Additionally, we will be conducting a brief Virtual Investment Update on Monday, May 23rd at 4 PM CT. This will be a live online presentation to bring our client up to date on the present environment, our outlook, and current strategies. This presentation will be approximately 30 minutes in length and will be recorded if you cannot watch live. Login credentials will be sent later this week.
As we mentioned in our email last week, we continue to be aware the damage inflation and the Federal Reserve’s commitment to fight inflation is having on the equity and bond markets. We believe the changes we are making in the equity allocation will help position the equity holdings to perform throughout this season of volatility… and participate well in the recovery when it inevitably comes. We will remain fully invested in the appropriate allocation of equities in your account. The changes involve rebalancing and adding one new international position to all accounts that contain equities.
Specifically, we are adding a position in all accounts with equities the Goldman Sachs International Opportunities Fund. This is a Large Cap Blend fund that invests in companies with an international footprint. When you look at this fund’s current holdings they are equally proportioned between value and growth companies, which makes this fund a Large Cap Blend. This fund has outperformed its benchmark by an average of 5.49% every year since its inception and has been in the top tenth percentile of its peers in every period since inception. Currently (as of 3/31/2022) this fund is over-weight energy, materials, consumer staples, financials, and health care and is under-weight technology, consumer discretionary, and communication services. While this is an international fund, it currently (as of 3/31/2022) has most of its performance attribution from Europe and the United States. We will be buying ticker symbol GSIMX, which is the institutional share class with the lowest net expense ratio of all shares at 0.77%.
For fixed income, we remain very low duration in the current bond allocation. Our decision to stay low duration has helped our bond positions to outperform the benchmarks. However, we will look to stretch out duration once we see interest rates begin to level off.
As always, if you have any questions, please don’t hesitate to reach out anytime.