HLMEX – Q1 2019 Commentary
The Harding Loevner Emerging Markets Fund outperformed its benchmark during the quarter driven primarily by strong stock selection. The team held onto names that were out of favor at the end of 2018, and these positions bounced back to help the fund return over 14%. The team continues to focus on picking growth oriented names with sustainable long term investment advantages.
MWTIX – Q1 2019 Commentary
The MetWest Total Return Bond Fund outperformed the Barclays Agg during the quarter as they were helped by duration positioning and legacy asset backed positions. The team believes that the Fed has indicated its future course of action may be swayed by market movements, and we could have possibly reached the end of the current hiking cycle.
HILIX – Q1 2019 Commentary
The Hartford International Value Fund underperformed its benchmark during the quarter and has now lagged over the past twelve months. During Q1, underperformance was driven by stock selection in financials and materials. The team remains focused on long term results investing in companies that are out of favor but have strong balance sheets and growth potential.
Attached is the presentation from this morning’s meeting discussing the sale of MLPs.
[Asset Allocation]
Peter Malone, CFA
Research Analyst
Direct: 617.226.0030
Fax: 617.523.8118
Crestwood Advisors
One Liberty Square
Suite 500
Boston, MA 02109
LISIX – Q1 2019 Commentary
The Lazard International Strategic Equity Fund outperformed the MSCIA EAFE Index in the first quarter by 150 bps driven by stock selection across most sectors. While political issues such as Brexit and trade can cause some market uncertainty, the team believes that market growth can be maintained given a more lax outlook in global monetary policy.
Market Overview:
– International equities rebounded strongly in the first quarter after weak end to 2018
o This was buoyed mostly by confirmation of the dramatic reversal in tone from the Fed
– Some signs of progress in US/China trade talks were also helpful
o Accompanied by early signs of stability in China after a variety of government stimulus
– With a combination of easing economic fears, and potential peak in rates, gains were broad based as both cyclical areas such as materials and more stable operations
– Technology sector saw jumps in both the cyclical semiconductor space and in long duration growth stocks
o Financials lagged, however, dogged by poor results, Scandinavian money laundering scandal and falling rate expectations
Performance Overview:
– Lazard International Strategic Equity portfolio outperformed the MSCI EAFE Index in the quarter
o Driven by stock selection across a number of sectors, mostly stemming from encouraging earnings reports
– In the industrials sectors, lock maker Assa Abloy and pilot training company CAE all showed good progress
o Chinese commerce giant Alibaba reported reassuring numbers, as did both Chinese insurer Ping An and its bank subsidiary
o Media stock Vivendi saw strong sales and rising bid speculation for its music business
– On the negative side, Spanish utility Red Electra was hurt by political uncertainty and a surprising satellite acquisition
– Japanese real estate company Daiwa House succumbed to sector weakness
– In the Philippines, conglomerate GT Capital is still seeing pressure on sales and margins at its Toyota auto business
Market Outlook:
– On the macro side, China is showing some signs of stabilization from its credit and sentiment slowdown, though Europe slowed further
– U.S. economic data was mixed with the labor market strong but forward looking indicators slowing
o Rising rates and cooling global growth started to bite
– Company reports have focused on weakening economy and cost pressures in many markets
– China has announced a variety of small stimulus measures, but the major change of tone came from the Fed, who went from increasing rates to possible decreasing
o The extent of this change was surprising given the amount of debt that has continued to pile up on public and private balance sheets
– Political issues such as Brexit and the trade war remain concerns but the market appears prepared to shrug off slowing growth again as monetary policy headwinds fade
– Overall, the team remains confident that by focusing on stock selection of sustainably high growth the long term track record can maintain
Performance Review:
[Mutual Fund Commentary}
Peter Malone, CFA
Research Analyst
Direct: 617.226.0030
Fax: 617.523.8118
Crestwood Advisors
One Liberty Square
Suite 500
Boston, MA 02109
BEXIX – Q1 2019 Commentary
The Baron Emerging Markets Equity Fund outperformed its benchmark during the quarter as EM equities bounced back to start the year. Many of the most impaired names recovered and Baron had incremental gains in all but two equity sectors. Baron believes that China will continue to surprise on the upside in 2019 helping drive broad EM performance.
Continue reading “Baron Emerging Markets – Q1 2019 Commentary”
WATFX – Q1 2019 Commentary
Western Asset had a strong quarter outpacing the Agg by over 100 bps. The fund was helped by its quality credit exposure and slightly extended duration relative to the Agg. The team believes that U.S. growth should continue at a moderate pace and is looking for international developed countries to improve their economic outlooks.
Continue reading “Western Asset Core Bond – Q1 2019 Commentary”
Crown Castle International Corp. (CCI) had another strong quarter, reflecting the significant demand for shared infrastructure assets and positive execution by the team. While FFO was lower than street expectations, site rental revenues and adjusted net income came in higher than expected. CCI kept its full year expectations for revenues, EBITDA and AFFO unchanged. The higher levels of tower leasing experienced in the back half of 2018 continued in the first quarter, and CCI expects to nearly double its small cell fiber deployment in 2019. CCI is pursuing the expanding small-cell opportunity by focusing on top markets where there is greatest potential demand. The playbook is similar to towers in that they are providing fiber solutions and establishing common asset sites across their customer base. By increasing the number of users on an individual small cell site, they are incrementally increasing cash flow and, in turn, dividend yield for its investors.
Current Price: $122 TTM Return: 18%
Target Price: $125 Position Size: 2%
Good Morning,
Attached is the most recent chart pack put out by SSGA.
Thank You,
Pete
Peter Malone, CFA
Research Analyst
Direct: 617.226.0030
Fax: 617.523.8118
Crestwood Advisors
One Liberty Square
Suite 500
Boston, MA 02109
Good Morning,
I have attached the updated Monthly Market Monitor from Eaton Vance.
Thank You,
Pete
Peter Malone, CFA
Research Analyst
Direct: 617.226.0030
Fax: 617.523.8118
Crestwood Advisors
One Liberty Square
Suite 500
Boston, MA 02109
