Thank you to everyone who joined us for our most recent quarterly webinar. This quarter's discussion centered around the theme of uncertainty, a word that surfaced repeatedly as the investment team addressed recent economic data, political shifts, and capital market behavior.
Director of Portfolio Management Jeff Hibbeler opened with a review of the economic backdrop. Volatility remains elevated across both equity and fixed income markets, and the yield curve has shown some steepening even as short-term rates stay inverted. Inflation has moderated slightly in recent months, while the labor market remains relatively strong despite a modest uptick in unemployment. Jeff noted a growing disconnect between resilient economic data and declining consumer sentiment.
He then outlined the firm’s fixed income positioning, which continues to emphasize balance. The team has maintained exposure across Treasuries and corporate bonds, added Treasury Inflation-Protected Securities (TIPS) to help hedge inflation, and focused on higher-quality, less economically-sensitive issuers. Jeff also highlighted improved relative value in municipal bonds, driven by seasonal cash needs and supply dynamics.
Senior Portfolio Manager Pete Trontis also shared his thoughts on the equity environment. He pointed to ongoing uncertainty around trade, regulation, and fiscal policy as key drivers of hesitation among consumers and businesses. This uncertainty is creating a gap between sentiment data and economic activity.
In response, Exencial’s equity portfolios have remained cautious and diversified. While many parts of the market started the year pricing in ideal conditions, Pete notes that the firm has positioned itself more conservatively. He also discussed how international markets have begun to outperform as foreign investors reallocate capital away from U.S. assets.
If you have any questions about market conditions or your investment strategy, please contact your Exencial advisor. To watch the full webinar recording, click here.
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