Fireworks came early this year. They started on “Liberation Day” and continued with the subsequent market selloff and speedy recovery as trade negotiations and tariff changes ensued. Artificial intelligence (AI), “One Big Beautiful Bill” and conflict between Israel and Iran all dominated markets and headlines at one time or another. Surprisingly though, equity markets finished the quarter higher. Going forward, key areas of focus include:
- Corporate Earnings: How will businesses be impacted by this environment? EPS growth is expected to be 7% for the second half of the year. Additionally, combining passive U.S. large cap exposure with active strategies that focus on less efficient areas of the market may be beneficial.
- The Fed: Rates have wide ranging impacts on economic growth, bond yields and the cost of capital. Treasuries provide yield for now, and dry powder to redeploy when better opportunities arise.
- Private Markets: Together, slower deal making activity, the “democratization of private markets,” and increasing secondary activity create pockets of opportunity. Private capital programs can benefit from 1) manager selection as always, 2) secondary investments given current supply-demand dynamics, and 3) co-investments to dollar cost average down the all-in fee load.
Today, we believe a disciplined, long-term strategic approach with shorter-term risk management is essential to ensuring capital is appropriately positioned for both risk and opportunity. So stay the course, but be ready for more fireworks.
Read the full Q2 2025 Portfolio Insights.