Forty "W"ritings

In July, US equity markets had a positive month overall, with large-cap stocks (S&P 500 - SPY) slightly outperforming small-caps (Russell 2000). On the international front developed markets (IEFA) were negative after a stellar first half of the year. Emerging markets (EEM) proved relatively resilient compared to Europe and Japan, even as global trade and growth concerns hung over markets. Core aggregate bonds (as shown by AGG) posted a modest loss of -0.17%, pressured by rising yields for most of the month before a late rally. High-yield bonds outperformed, benefiting from a supportive risk environment and less rate sensitivity.

The first half of 2025 delivered a tale of two quarters for US equity markets, characterized by significant volatility that ultimately resolved in modest positive returns across major equity indices. The bond market delivered solid, positive returns in the first half of 2025, with most high-quality fixed income sectors up by low- to mid-single digits. We believe investors should remain vigilant to both opportunities and risks while maintaining a focus on long-term fundamentals.

The excitement surrounding the AI ecosystem is immense, and it’s easy to get caught up in the hype. But it’s important to remember that we are still in the early stages, and we encourage investors to take a step back and consider the full picture. The investment opportunities related to AI span multiple sectors and extend beyond the public markets alone.

With the negative impact of rising interest rates hopefully out of the way bond yields are attractive. If interest rates were to fall returns would further benefit from price appreciation. In this article we breakdown the math of how bonds generate returns for investors.

In an era of uncertainty, it's important to remain diversified with your equity exposure. US stocks have had a good run of form the last decade that have driven valuations up to a level that has historically meant muted forward looking returns. The rear-view for international stocks has not been as impressive but there is reason to be optimistic looking forward. International stocks are currently trading at a valuation discount compared to US stocks, earnings growth from foreign companies are improving, foreign governments are implementing more supportive economic policies and de-globalization could mean less money flowing into US assets from foreign investors in favor of their local economies and markets.

Private investments—such as private equity and private credit—can serve as a powerful complement to traditional assets in a broader investment portfolio because they provide exposure to investment opportunities that would otherwise be inaccessible via public markets. These opportunities continue to expand as the size of private markets grew considerably in recent years.