Portfolio Manager Commentary

Q2 Market and Portfolio Review

In the second quarter of 2025, equity markets finished higher after a down 1Q25 and now hover at or near all-time highs across most broad indices. The quarter was marked by a swift selloff in early April following President Trump’s Liberation Day tariff announcement on April 2^nd. The announcement itself was not a surprise, but the breadth of countries included, the level of tariff rates imposed, and the short implementation timeframe created considerable concern for global markets. Equity markets had been under pressure since late February and throughout March as the new administration rolled out initiatives deemed concerning for the economy, and the tariff announcement only added fuel to the fire. However, a week after Liberation Day, the administration put in place a 90-day pause on tariff implementation and started talking about numerous ongoing trade deal negotiations. This caused markets to reverse course, and a strong rally ensued through quarter-end. Other investor concerns around DOGE spending cuts, immigration policy, and geopolitical strategy remain, but they were offset by generally upbeat earnings reports from companies and continued solid economic data, both of which contributed to the 2Q rally. The Fed, which has also been set on keeping rates higher for longer in the face of sticky inflation data, is beginning to hint at multiple rate cuts in 2025. At NCG, we continue to closely monitor each development and the potential impact on our portfolio holdings. Volatile periods create opportunities and challenges, but we continue to rely on our long-tenured, experienced and stable team. There are many exciting areas of growth within the US economy, and we continue to invest in what we believe are the fastest growing and highest quality companies in America.