The third quarter of 2022 started well before ending very badly with equities losing close to 10% in September – the end result was that most equity and fixed income markets more or less ended where they started. Current market conditions continue to remain challenging with all of the same forces at play detailed in our previous quarterly letters. With most balanced portfolios now down 13-15% on a year-to-date basis, we are extremely pleased to have protected capital on behalf of our clients whose investment portfolios have declined substantially less than their risk-appropriate benchmarks.
Year-to-date performance of Multi-Asset Reference Portfolios
Portfolio Description Total Return
Conservative 40% equities, 60% fixed income (13.0%)
Moderate 50% equities, 50% fixed income (13.6%)
Balanced 60% equities, 40% fixed income (14.2%)
Growth 70% equities, 30% fixed income (14.8%)
Aggressive 80% equities, 20% fixed income (15.3%)
With valuations in the process of resetting with the continued normalization of interest rates, we take comfort in the “fortress portfolios” we have constructed on behalf of our clients. Allocations to our Stable Portfolio continue to provide a meaningful combination of income, diversification, protection from inflation, and risk mitigation during this unprecedented volatility.
With risks in the market remaining elevated and compelling arguments for a recession driven by demand destruction and/or stagflation – your portfolio is prepared for either of these extremes as well as whatever may fall in between. We remain of the view that this recent volatility is here to stay and that they key to delivering positive outcomes will come from a disciplined, highly scientific, and resilient approach to portfolio construction and risk management.
I encourage everyone to revisit our firm’s pillars regarding our culture, investment philosophy and process.
We would like to thank you for your continued support and trust that you have placed upon as being stewards and fiduciaries of your capital.