The Day Hagan Smart Core Equity portfolio seeks to invest in companies with positive economic profitability, sound balance sheets, durable cash-flow generation, and valuations that may provide a margin of safety. We believe this combination of quality, profitability, and valuation can help identify attractive long-term opportunities across market cycles.

July reminded investors that a bond can offer attractive income and still lose ground when the market reprices inflation, policy, and supply. The 3-month Treasury bill ended the month near 3.78%, only two basis points lower than in June. Farther out, the 5-year yield rose 21 basis points to 4.45%, the 10-year climbed 26 basis points to 4.74%, and the 30-year increased 31 basis points to 5.28%.

July reduced the international equity debate to two powerful forces. The first was the technology investment boom, which continued to lift semiconductor equipment, foundries, memory, data-center infrastructure, and advanced manufacturing. The second was the renewed energy shock from the Iran war.

July was a month of sharp contrasts. The S&P 500 slipped only 0.1%, but the calm index result hid a forceful rotation. Energy gained 10.8%, Financials rose 6.4%, and investors moved toward companies tied to oil, credit, defense, infrastructure, and current cash flow. Technology weakened, with semiconductor shares absorbing the sharpest selling. The market did not reject artificial intelligence.

In June, the U.S. equity market became more selective. The first half still belonged to earnings, AI infrastructure, power demand, defense spending, and companies able to protect margins in a higher-cost world. Yet the month also showed that leadership can rotate quickly when rates rise, inflation data firm up, and investors question whether the most crowded growth trades have already been priced in.

With this month’s rebalance, we are expanding the Smart Sector International opportunity set by adding South Korea, Taiwan, India, and the Netherlands to the Developed Market lineup. This is not a cosmetic change. It reflects how global market leadership has changed.

June turned fixed income into a contest between income and inflation. May payrolls, released in June, rose by 172,000, unemployment held at 4.3%, and wage growth cooled to 3.4%. Growth was firm enough to support credit, but not weak enough to make duration an easy call. Inflation was the problem. May CPI rose 4.2%, PCE rose 4.1%, and core PCE climbed to 3.4%.

The Portfolio is designed to invest in companies that we believe have the potential to deliver excess returns through positive economic profitability, solid balance sheets (quality), meaningful cash generation (profitability), and trading at considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

The Day Hagan Smart Core Equity Portfolio is designed to invest in companies that we believe have the potential to deliver excess returns through positive economic profitability, solid balance sheets (quality), meaningful cash generation (profitability), and trading at considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

Global equities entered June with a more complicated setup than the spring rally suggested. By month-end, the macro picture looked less forgiving than it had earlier in the spring. Investors still favored companies with clear profit drivers, but the broader case for risk assets became more dependent on inflation cooling, fuel prices staying contained, and central banks avoiding a policy mistake.

Global fixed income markets were choppy in May as investors balanced elevated inflation, slower labor momentum, Treasury supply, and shifting geopolitical risk. The Federal Reserve held the federal funds target range at 3.50% to 3.75% at its late-April meeting, and the minutes released in May showed policymakers focused on inflation risk, energy prices, tariffs, and uncertainty in the Middle East.

In May, the U.S. stock market extended its advance, supported by strong corporate earnings, renewed enthusiasm for artificial intelligence, and economic data that still pointed to growth, though with less breadth beneath the surface.

The DH Smart Core Equity Portfolio is designed to invest in companies that we believe have the potential to deliver excess returns through positive economic profitability, solid balance sheets (quality), meaningful cash generation (profitability), and trading at considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

In April, the U.S. stock market was supported by robust corporate earnings, renewed interest in artificial intelligence, and economic data that signaled ongoing growth. The Nasdaq, S&P 500, and Dow all posted strong gains for the month, led primarily by large-cap technology, software, semiconductor, and AI-related companies.

April delivered a classic late-cycle macro plot twist. Equities sought to celebrate AI, while bond markets had to reprice the risk that inflation was not finished. The month’s defining shock came from energy. March CPI, released April 10, rose 0.9% month over month and 3.3% year over year, with energy up 10.9% and gasoline up 21.2%, the largest monthly gasoline increase recorded.

April was a challenging month for global fixed-income markets, with higher energy prices, persistent inflation, and waning hopes of quick central bank rate cuts. In the United States, the March Consumer Price Index (CPI) climbed 0.9% month over month and 3.3% year over year, with energy prices making the biggest impact—gasoline alone rose 21.2% in March.

Fixed income markets in March were shaped less by a benign disinflation narrative and more by a late-month stagflation shock tied to the war in Iran and the surge in oil prices. U.S. Treasury yields rose sharply over the month, with the two-year posting its biggest monthly increase since October 2024 and the 10-year rising by nearly 40 basis points before retracing part of the move in the final days of March (and after the April 3 payrolls report).

In March, international equity markets behaved less like a macroeconomic battleground and more like a referendum on energy security. The month’s dominant force was the escalation of the U.S.-Israeli conflict with Iran, which disrupted traffic through the Strait of Hormuz, sharply lifted Brent crude prices, and forced investors to reprice inflation, growth, and risk premiums across Europe and Asia.

U.S. stocks faced a turbulent March, despite a strong rebound on the final trading day. Over the month, the S&P 500 index declined 5.1%, the Dow Jones Industrial Average dropped 5.4%, and the Nasdaq Composite fell 4.8%. Investors spent much of March grappling with higher energy costs, renewed inflationary pressures, and persistent concerns about slowing growth.

The Portfolio is designed to invest in companies that we believe have the potential to deliver excess returns through positive economic profitability, solid balance sheets (quality), meaningful cash generation (profitability), and trading at considerable margins of safety (valuation).