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”
DBLTX – Q4 2018 Commentary
As volatility spiked in 2018, investors moved away from risk assets and the Barclays Agg was flat for the year. The DoubleLine Total Return Bond Fund outperformed its benchmark during the fourth quarter and added 174 bps of outperformance for the full year. Given the current state of local and global fixed income markets, DoubleLine favors actively managed products that are well diversified and biased toward quality holdings.
TORIX – Q4 2018 Commentary
The broad energy sector was down nearly 24% during the fourth quarter and midstream pipelines were down almost 14%. The Tortoise MLP & Pipeline Fund ended the year down 15% due to decreasing oil prices, uncertainty around OPEC meetings, and unknown short term implications of getting rid of IDRs. As we have seen to start the year, MLPs have started to come back as oil prices have crept higher and investors see the space as a yield play with strong fundamentals over the long term.
TCPNX – Q4 2018 Commentary
The Touchstone Impact Bond Fund fell short of its benchmark in the fourth quarter but outperformed for the year as a whole. Touchstone maintains a quality diversified portfolio that remains agnostic to the yield curve. The team believes that its current positioning in Treasuries and MBS should benefit from the divergent Fed monetary policy and global trade disputes as demand from foreign investors has decreased.
HILIX – Q4 2018 Commentary
The Hartford International Value Fund underperformed its benchmark during the fourth quarter and for the full year. The team began to defensively position the portfolio but was not positioned well enough toward year end. Given the recent sell off in the market, the team sees buying opportunities as they focus on companies with low valuations, low relative price, and low expectations.
WATFX – Q4 2018 Commentary
Western Asset Core Bond underperformed during the fourth quarter and lagged the benchmark slightly for the year. The largest relative detractor was the exposure to investment grade credit. Following a period of increased volatility, the team has repositioned the portfolio to take advantage of more attractive pricing across certain sectors.
MWTIX – Q4 2018 Commentary
The MetWest Total Return Bond fund slightly lagged the Agg during the fourth quarter but outpaced the benchmark for the year. The strategy had strong relative performance for the year due to its investment grade credit positioning and exposure to Non-agency MBS. MetWest maintains a defensive positioning with non-cyclical credits, high quality securitized exposure, highly liquid Agency MBS, and a duration in line with the benchmark.
TIREX – Q4 2018 Commentary
The real estate sector sold off during the fourth quarter, but actually gained substantial ground relative to the S&P 500 for the year. The TIAA CREF Real Estate fund slightly was also down for the quarter but slightly outperformed the FTSE Nareit All Equity REIT Index. The team remains focused on long term growth oriented REITs and believes that, following an extended period of underperformance, valuations in real estate are very attractive.
HLMEX – Q4 2018 Commentary
Emerging market equities sold off during the fourth quarter but actually outpaced developed markets on a relative basis. The Harding Loevner Emerging Markets Equity fund underperformed its benchmark for the year driven mostly by sector selection as they faced a significant style headwind. Harding sees long term opportunity in EM, however, as there are new growth opportunities with companies that have taken advantage of research and technology to become multinational and less dependent on their domestic economies.
LISIX – Q4 2018 Commentary
Along with nearly all global equity markets in Q4, international developed sold off significantly. During the period, the Lazard Strategic International Equity portfolio did outperform its EAFE benchmark, which is to be expected in periods of extreme volatility. The team is monitoring geopolitical concerns in Europe and Asia but believes that softening policy in the U.S. and the start of Chinese stimulus should help global equity markets.
