The first quarter proved very challenging for the markets. Both the broad equity and fixed income markets experienced negative returns. With balanced portfolios down around 6% on average over the quarter, we are pleased to report that our clients experienced declines in the value of their portfolios on the order of 1.25 – 1.75%.
This is a testament to the disciplined process we follow; in a market where traditional asset classes are primarily dependent on equity market direction and declining interest rates for their performance, we have sought out additional strategies and risk exposures which enable us to participate in markets that are trending upwards and more importantly play defense when they are moving sideways or downward.
Over the past several years, we have allocated more client capital towards these asset types, the majority of which reside in our Stable Portfolio. The Stable portfolio is comprised of 12 - 15 core holdings of managers that in the aggregate help us to diversify client risk away from equity and interest rate exposure. These portfolio allocation decisions arise from a purposeful multi-year, risk-based framework for selection and inclusion, which has rewarded our clients over time, as evidenced by the fact that 11 of these strategies experienced modest positive returns in the quarter ranging from 0.30% to 4.00%.
We continue to operate under the assumption that forward-looking returns will be not only lower but also more volatile. As always, at Anchor Pacific, we remain diligently focused on designing and structuring portfolios to be resilient and perform to meet client goals across a wide range of potential economic outcomes.
We would like to thank you for your continued support and trust that you have placed upon us in being stewards of your capital.
