LISIX – Q4 2017 Commentary
The Lazard International Strategic Equity Fund outperformed the MSCI EAFE Index during the fourth quarter, and outpaced the benchmark by almost 300 bps for the year. The team continues to focus on stock selection, maintaining a long term outlook on companies with sustainable high or improving earnings growth.
LISIX – Q3 2017 Commentary
The Lazard International Strategic Equity Fund outperformed its benchmark, MSCI EAFE Index, in the third quarter and has outpaced the index YTD. The Lazard team has rebounded from a period of underperformance that spanned the second half of 2016 through January of this year. The team remains focused on fundamental stock selection, looking for quality names with long term growth potential.
DBLTX – Q3 2017 Commentary
The DoubleLine Total Return Bond Fund outpaced the Agg during the quarter and is ahead by about 40 bps YTD. The fund has benefited from its positioning in RMBS and has been able to garner strong returns while taking on less risk than the benchmark. The team will monitor the effects of the Fed unwind but does not believe it will lead to a large spread widening due to the transparency set by the Fed.
TCPNX – Q3 2017 Commentary
Touchstone Total Return Bond Fund continues to be a steady, quality-driven strategy that outpaces the index on a risk adjusted basis over time. During the third quarter, the fund’s performance was in line with the benchmark, and TCPNX has outperformed on the year. The team believes the fund is well positioned and maintains a discipline that properly balances risk and return objectives for the current market environment.
TORIX – Q3 2017 Commentary
The Tortoise MLP & Pipeline Fund had positive returns during the third quarter and has outpaced its ETF counterpart (VNQ) year to date. However, the asset class has experienced a sell off, driven mostly by oil prices in the first half of the year.
Despite stabilized crude oil prices during the third quarter (and through October), company specific issues have negatively affected the sentiment of the broader index. Much of the selloff came as a result of Enterprise Product Partners announcing it will slow down its projected distribution growth rate. It is important to note that they are not cutting the distribution but rather slowing the growth.
Their reasoning is that the market is not rewarding the high growth rate (approximately at 6.5%), and they will look to use cash as a way to fund new projects. Normally, MLPs will fund internal investment by issuing equity (or new MLP units). Equity capital markets have been relatively difficult for larger deals in the MLP space this year.
Tortoise believes it is possible that other MLPs may reassess distribution policies in order to best balance shareholder return through payouts and company growth. The Tortoise team remains confident that the fundamentals within the MLP space are strong and believes that the long term outlook for midstream companies is positive.
Baron Emerging Markets had a strong quarter outpacing its growth benchmark as well as the broader MSCI EM Index. Emerging Market equities continue to outperform since the asset class began to rebound at the beginning of the year. The Baron managers are aware that some of the recent growth has been due to cyclical earnings expansion but they are confident that a more secular trend is beginning to take place within emerging markets.
During the quarter, the Hartford International Value Fund outperformed its International Value Index and continues its track record of consistent relative performance. The team benefitted from bottom-up stock selection in Q3.
Western Asset Core Bond outperformed the Barclays Aggregate Index during the quarter, helped by high quality credit and an overweight to non-agency MBS. The team recently added to its agency MBS exposure to take advantage of improved valuations.
MetWest Total Return slightly lagged the benchmark during the quarter but remains generally in line year to date. The team maintains its focus on higher quality, more defensive areas of the market with a relatively shorter duration profile. The fund continues to outperform on a risk adjusted basis. Continue reading “MWTIX – Q3 2017 Market Commentary”
TIAA CREF Real Estate Securities had a strong quarter, outperforming its benchmark by over 30 bps. The team has been able to outperform significantly this year, due in part to its ability to underweight regional malls within the retail sector. They are now beginning to pair back the underweight given the attractive valuations within the sector but will focus on A-tier malls with longer term growth potential.
