FEG Investment
Advisors

First Quarter Portfolio Insights: Spring Forward, Fall Back

<span id="hs_cos_wrapper_name" class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_text" style="" data-hs-cos-general-type="meta_field" data-hs-cos-type="text" >First Quarter Portfolio Insights: Spring Forward, Fall Back</span>

After an initial "spring forward" in equity markets to begin the quarter, a "fall back" quickly ensued. Uncertainty and change were the only constants in both policy and markets.

The economic policies of the current administration have been a little bit like the spring weather. If you do not like it, wait a few minutes. There is a similar lack of clarity on inflation and interest rates, corporate earnings, and private markets deal making and capital distributions. Given this uncertainty, FEG is not “springing” into action just yet, but is also not standing still and letting the seasons pass by.

Key areas of focus include:

  • A broadening market: Search for pockets of opportunity outside of U.S. large cap stocks, including small caps and non-U.S. markets. Combine passive U.S. large cap exposure with differentiated strategies that focus on less efficient areas of the market.
  • Rates > Credit. So, do not be a hero in fixed income: Credit spreads are tight, so concentrate on higher quality for now. This provides dry powder to re-deploy if and when better opportunities arise.
  • Illiquidity premium (or at least liquidity): Continue private capital programs to seek a return premium versus public markets over the long-term. Some assembly required, but it can be done. FEG is closely monitoring strategies that buy and professionalize smaller founder-led and family-owned businesses. While distributions (liquidity) remain soft, FEG believes they will return eventually.

Despite extreme volatility and a lack of clarity on tariffs and other policies, select opportunities within the volatility exist. Prudence requires balancing a strategic approach to risk management and diversification with tactical opportunism. As spring inevitably turns to summer, it would be wise to carry an umbrella.

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Read the full Q1 2025 Portfolio Insights.

 

 

Authors

Nolan Bean

Disclosures

This information was prepared by Fund Evaluation Group, LLC (FEG), a federally registered investment adviser under the Investment Advisers Act of 1940, as amended, providing non-discretionary and discretionary investment advice to its clients on an individual basis. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Fund Evaluation Group, LLC, Form ADV Part 2A & 2B can be obtained by written request directed to: Fund Evaluation Group, LLC, 201 East Fifth Street, Suite 1600, Cincinnati, OH 45202 Attention: Compliance Department.

This information is prepared for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person who may receive this presentation. Neither the information nor any opinion expressed in this report constitutes an offer, or an invitation to make an offer, to buy or sell any securities.

The information herein was obtained from various sources. FEG does not guarantee the accuracy or completeness of such information provided by third parties. The information in this presentation is given as of the date indicated and believed to be reliable. FEG assumes no obligation to update this information, or to advise on further developments relating to it.