- In spite of weak macroeconomic data and fears of a resurgence of COVID-19, U.S. equities continued their rally in July, aided by Fed stimulus and strong earnings results The S&P 500® gained by 6%, while the S&P MidCap 400® and the S&P SmallCap 600® gained by 5% and 4%, respectively. The total return for the S&P 500 is now modestly positive year to date. Volatility declined, with the VIX® closing the month at 24.46.
- International markets also gained, with especially strong performance in the emerging markets. The S&P Developed Ex-U.S. BMI and S&P Emerging BMI were up 3% and 8%, respectively.
- With the exception of Enhanced Value, all factor indices posted gains, with Momentum and Low Volatility in the lead. Consumer Discretionary and Utilities were the top performing sectors.
- After March’s carnage, U.S. equities roared back in April, driven by fiscal stimulus and the apparent slowing of the spread of COVID-19. The S&P 500® gained by 13%, the best monthly performance since January 1987. In a reversal from the recent past, mid-caps performed even better, with the S&P MidCap 400® up 14%. While still relatively high, volatility calmed, with the VIX® closing the month at 34.15.
- International markets also recovered, with the S&P Developed Ex-U.S. BMI and S&P Emerging BMI up 8% and 10%, respectively.
- All factors and sectors posted gains, with High Beta and Growth in the lead, followed by Equal Weight, thanks to the recovery of smaller-caps. After suffering this year and in spite of the volatility of oil prices, Energy made a comeback as the top performing sector.
|We will continue to monitor the situation and make any recommendations that we deem appropriate, but given that your goals and time horizons haven’t changed, we believe the current strategy remains the best course of action.
I’d like to share today’s insights from Schwab Chief Investment Strategist Liz Ann Sonders in response to the economic implications of COVID-19 and the recent crash in oil prices: Manic Monday (Tuesday, Wednesday, Thursday, Friday).
I hope these insights help you navigate the current market volatility. Please reach out with questions or for more information.Manic_FINAL
A Core principle of the Park + Elm’s Investment Strategy is investing efficiently, and adding value by analyzing and reducing portfolio expenses. We focus on partnering with firms that value those same principles, in order to deliver a cost efficient, research based portfolio for our clients.
We are thankful to be partners with a well-respected organization that recently announced fee reductions. As a fiduciary, we continuously analyze the cost of building a portfolio, and work with partners that add value through reducing expenses. Dimensional Fund Advisors is pleased to announce a reduction in management fees or expense caps for 77 US Mutual Funds effective February 28, 2020.
Across Dimensional US Funds, there will be an average management fee reduction of 8% on an asset-weighted basis. Many of Dimensional’s most widely held funds, including the flagship Core, Value and Fixed Income portfolios, will see management fee reductions. For a full list of the changes, please refer to the table below.
“We evaluate expense ratios and management fees for every fund on an ongoing basis and look to make adjustments where appropriate,” said Co-CEO Dave Butler. “We have made previous reductions to US Fund management fees or expense caps in 2015, 2017, and 2019.”
“We expect to do better than benchmarks and peers, after fees, so we fight for every basis point,” noted Gerard O’Reilly, Co-CEO and CIO. “We continue to gain insights from research and innovate across all aspects of our process.”
Dimensional US Mutual Funds – Management Fees
Dimensional US Mutual Funds – Total Management Fee Limit
Dimensional US Mutual Funds – Expense Limitation Amount
This is a BIG deal. This will positively affect our portfolio values, and, long-term, can make an impactful difference in retirement. Investing in equity markets can be risky and volatile, but expenses are one controllable aspect of an investment strategy. These efforts also confirm that Park + Elm and Dimensional are working to give clients the best products, in the most efficient way.
- U.S. equities started the year strongly, but gains were erased towards the end of the month as a result of coronavirus fears. The S&P 500® was flat in January, while smaller-caps lagged, with the S&P MidCap 400® and the S&P SmallCap 600® down 3% and 4%, respectively.
- International markets declined, with the S&P Developed Ex-U.S BMI and S&P Emerging BMI down 2% and 4%, respectively.
- Low Volatility was the top performing factor; not unrelatedly, Utilities was the top performing sector with Real Estate close behind. Similarly, Momentum and Growth were the next best factor index performers, while Info Tech and Communication Services were the second and fourth best performing sectors. Meanwhile, in a reversal from last year’s outperformance, Value lagged Growth.