The DH Smart Value Portfolio continues to invest in companies that deliver excess returns through strong economic profitability, solid balance sheets (quality), significant 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 October, global bond markets experienced modest yield declines, though total returns were uneven across regions. The Bloomberg Global Aggregate Bond Index fell roughly 0.3% as elevated global issuance and stretched valuations weighed on returns.

Global equity markets in October reflected a mix of optimism and caution. Strong corporate earnings, particularly in the technology sector, and expectations of monetary easing improved investor sentiment. Equity funds experienced significant inflows in early October, the highest in nearly a year, as weaker U.S. inflation and a disappointing jobs report raised hopes for Federal Reserve rate cuts.

November was a telling month. For the bullish camp: the Federal Reserve cut rates in late October and reaffirmed its easing intentions, which helped risk assets; corporate earnings remained resilient across many sectors; and, despite uncertainty, the economy still showed durability.

The DH Smart Value Portfolio continues to invest in companies producing excess returns through positive economic profitability, supported by solid balance sheets (quality), significant cash generation (profitability), and trading with considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

Fixed income returns in September were driven by a potent intersection of monetary policy shifts, abundant supply, and evolving risk premiums across sectors. The net result was generally lower yields worldwide.

During September, global equity markets advanced on the back of dovish central bank shifts, resilient corporate earnings, and a rotation into regions beyond the U.S. In the U.S., the S&P 500 and Nasdaq recorded their strongest September gains in 15 years propelled by a fully priced-in 25 bp Fed cut and optimism for further easing.

September was an interesting month. Whether you were bullish or bearish, there was data to support your stance. For example, expectations of eventual Fed rate cuts, steadier corporate earnings, and resilient demand supported upside momentum.

The DH Smart Value Portfolio continues to invest in companies producing excess returns through positive economic profitability, supported by solid balance sheets (quality), significant cash generation (profitability), and trading with considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

August was shaped by two global forces: new U.S. tariffs and shifting investor flows. The tariff package altered trade expectations and corporate guidance across supply-chain-heavy sectors. Flows swung through the month—early equity outflows on tariff headlines, a mid-month rebound as softer U.S. data hinted that tightening cycles were near an end.

In August, sector narratives were shaped by tariffs, macroeconomic indicators, earnings revisions, and interest rate developments. Overall, the tariff landscape tightened as several actions taken earlier in the summer resulted in a higher effective tariff burden by early August.

July was a telling month for global investors, as regional divergences in central bank policy and underlying economic momentum became increasingly impactful on relative currency moves. The U.S. dollar reached its trough on July 1, and the subsequent rally into the end of the month reduced international equity returns (in U.S. dollar terms).

July began with the index reaching record highs, bolstered by strong earnings expectations and optimism surrounding trade negotiations. However, caution emerged as market breadth and participation indicators diverged from price gains, hinting at the potential for increased volatility.

The DH Smart Value Portfolio continues to invest in companies producing excess returns through positive economic profitability, supported by solid balance sheets (quality), significant cash generation (profitability), and trading with considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

Global equities performed well in June, driven by a confluence of dovish central bank policies, divergent economic releases, and gyrating trade dynamics in the U.S., China, the Eurozone, Canada, Japan, and the Pacific region.

In June, the U.S. fixed income market navigated a complex landscape shaped by Treasury auctions, Federal Reserve commentary, and mixed inflation signals. Treasury yields experienced volatility but trended downward, with the 10-year Treasury yield closing at 4.235% on June 30, after peaking at 4.51% earlier in the month.

In June, the S&P 500 saw a significant increase of about 4.96%, marking its third-consecutive monthly gain after a challenging spring of policy shocks in April. This surge was fueled by supportive corporate earnings, decreasing volatility, and a normalization of trade tensions. Year-to-date, the index had risen approximately 5.5%, with a 12-month increase of more than 13.6%.

The Portfolio continues to invest in companies producing excess returns through positive economic profitability, supported by solid balance sheets (quality), significant cash generation (profitability), and trading with considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.