Equities generally rose last week as investors continued to digest third quarter earning reports. The industrials, utilities, and real estate sectors performed best, while communication services underperformed. Microsoft Corporation (MSFT), Alphabet Inc. (GOOGL), Amazon.com, Inc. (AMZN), and Meta Platforms, Inc. (META) weighed heavily on the declines following missed earnings reports and lowered future expectations. Ultimately the S&P 500 Index and the tech-heavy NASDAQ finished the week 3.97% and 2.25% higher for the week. Global sovereign yields largely fell last week in response to encouraging economic data, with the 10-Year U.S. Treasury yield dipping below 4.00% for the first time in two weeks. Ultimately, the 10-Year and 2-Year U.S. Treasury yield finished lower at 4.02% and 4.41%, respectively.
The Multi PLUS models are the most diversified set of models within our Strategy PLUS offering. Each model within this series is uniquely constructed to provide the most comprehensive exposure to our Strategy PLUS offering. Holdings within these models include Tactical strategies, which range from those that will implement high cash/fixed income positions during periods of market volatility, to strategies that maintain full market exposure but tactically adjust various asset classes, sectors, or regions. Strategic strategies are also included and are built on long-term market expectations to offer investors full market exposure at all times.In addition, underlying holdings within the models provide both Active management via individual stock or bond selection, as well as Passive, lower-cost exposure to a specific index or benchmark. We believe the combination of these Strategic, Tactical, Active and Passive elements can deliver the desired portfolio outcome with
greater diversification, improved risk management, and enhanced returns.
Equities and bonds were under pressure during the second quarter, with value oriented stocks outperforming their growth counterparts as rising rates, high inflation, and increasing recession concerns caused investors to continue to move away from growth-oriented tech stocks and rotate into more fairly valued sectors of the market. Within equities, a tactical business-cycle rotation strategy produced the highest benchmark-relative returns, positioned to hedge against inflation by having an overweight to commodity-related sectors and an overweight to defensive areas of the market. Within the TPFG
moderate strategies, a highly tactical strategy provided relative outperformance by utilizing quantitative measures to determine asset class exposure, comprised of a 30 allocation to fixed income and a 70 allocation to a tactical strategy that can shift between all equity or all cash. On the fixed income side, performance was strong across the conservative strategies. A fixed income ESG strategy was the strongest benchmark-relative performer. In addition, a tactical diversifier strategy that utilizes a blend of alternative asset classes and traditional fixed income posted strong performance, largely due to an allocation to real return assets.
The information provided herein is the opinion of The Pacific Financial Group, Inc. (“TPFG”) a registered investment adviser, and may change without notice at the discretion of TPFG. Spotlight contains models managed by TPFG and represent TPFG’s opinion and evaluation of its models. All information is believed to be accurate but has not been independently verified and TPFG makes no warranties as to the accuracy of the information or any representations made or implied. The information should not be construed or interpreted as an offer or solicitation to purchase or sell a financial instrument or service. The information is for informational purposes only and should not be relied on or deemed the provision of tax, legal, accounting or investment advice. Past performance is not a guarantee future results. All investments contain risks to include the total loss of invested principal. Diversification does not protect against the risk of loss. Investors should review all offering documents and disclosures and should consult their tax, legal or financial professional before investing. The indices are presented as broad-based measures of the equity, fixed income and consumer markets. The indices are provided for comparative and illustrative purpose to provide a comparison of the model against the broader based equity, fixed income and consumer market. The indices are not intended to reflect the investment objectives of the model as the securities held within the model will differ in market volatility, concentration, investment objectives and diversification among others from those of the indices. The indices are not managed, and returns do not reflect the deduction of fees, expenses, transaction costs or taxes that actual client accounts are subject to. Investors cannot invest directly in an index. Returns are not annualized for periods less than 1 year.
Trailing Major Index Returns and YTD S&P Sector Returns are sourced from Morningstar Direct.
* Sourced from JPMorgan Asset Management, publicly available at https://am.jpmorgan.com/us/en/asset-management/adv/ insights/market-insights/market-updates/weekly-market-recap/
All other economic and market data sources may include, and is not limited to: Edward Jones, publicly available at https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-marketweekly-update
Goldman Sachs, publicly available at https://www.gsam.com/content/gsam/us/en/advisors/market-insights.html
T. Rowe Price, publicly available at https://www.troweprice.com/personal-investing/resources/insights/global-markets-weeklyupdate. html