Portfolio Manager Commentary

Q1 Market and Portfolio Review

In the first quarter of 2024, equity markets continued to rally after solidly positive returns in 2023, which included a strong move in November and December. January 2024 was a bit of pause after the year end move, but February and March continued the upward trajectory. Investor sentiment has continued to swing wildly over the last few years. Through the first half of 2023, investors were buoyed by resilient economic data, a strong labor market, a slowdown in inflation, and speculation of a soft landing for the economy. However, this sentiment waned in Q3 2023 and into October 2023 as the Fed reiterated its commitment to rates remaining higher for longer, raising concerns about the impact on future economic growth. Sentiment received a big boost during Q4 2023. At the November 1st meeting, the Fed backed off their commitment to rates remaining higher for longer, and on December 13th, laid out their expectations for rate cuts sometime in 2024. The restrictive monetary policy over the last 18 months could still have lingering effects on the economy, but for now, investors have cheered the “Fed pivot” to a more accommodative stance. This momentum continued in the early part of 2024. The debate right now revolves around the timing of the first rate cut and the number of cuts in 2024. Economic data continues to be solid and inflation, while much lower than 12-18 months ago, remains sticky. This complicates the Fed’s decision-making process and messaging to the markets. Our philosophy, process and team remain consistent, and we continue to invest in what we believe are the fastest growing and highest quality companies in America. Please see the performance table for details.