Intuit – A DEOPX Case Study
October 2021
In the Davenport Equity Opportunities Fund (DEOPX), we rely on our deep research process to uncover quality businesses with strong balance sheets. Read more as we highlight our experience with long standing holding, Intuit Inc. (INTU), which illustrates what happens when we get our research right.
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ESG and the Davenport Asset Management Research Process
September 2021
Read on as Chris Pearson, SVP and Investment Policy Committee Member, breaks down the ESG movement and explains why we believe some ESG factors can be used to reduce risk in Davenport Asset Management strategies.
Highlighting Small and Mid-Cap
August 2021
The Davenport Small Cap Focus Fund (DSCPX) and the Davenport Equity Opportunities Fund (DEOPX) surpass benchmarks on a YTD basis as the “risk on” speculative trade fades and quality matters. Read on for our highlight on our small and mid-cap strategies.
July 2021 Market Update
Planned Giving Techniques
May 2021
“The Current State of Philanthropy” is a three part series by guest speaker Michele A. W. McKinnon of McGuireWoods.
In part three of the series, “Planned Giving Techniques”, Michele discusses some attractive strategies for giving in the current environment.
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Recent Tax Law Changes Affecting Charitable Giving
May 2021
“The Current State of Philanthropy” is a three part series by guest speaker Michele A. W. McKinnon of McGuireWoods.
In part two of the series, “Recent Tax Law Changes Affecting Charitable Giving”, Michele discusses recent changes to tax law and the consequences for charitable giving.
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Charitable Giving in the US & Donor Motivation
May 2021
“The Current State of Philanthropy” is a three part series by guest speaker Michele A. W. McKinnon of McGuireWoods.
In part one of the series, “Charitable Giving in the US & Donor Motivation”, Michele dives into the current state of giving in the United States and what motivates donors to give.
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Nonprofit Governance: Getting to Great
April 2021
As a follow up to a webinar in January we hosted titled “Thriving Nonprofit Boards”, Katherine Whitney of Warren Whitney put together a related report titled “Nonprofit Governance: Getting to Great”. This piece has tips on improving your nonprofit board and includes a self-evaluation checklist.
Quarterly Updates
2024 Q2 Update
We are halfway through 2024. So far, results for equity markets have been mixed and the lead stories have been the Federal Reserve, artificial intelligence (AI) and “narrow” returns. Many large cap technology leaders have produced stellar returns while other areas of the market have languished a bit. The S&P 500® Index is up an impressive 15.3% while the Dow Jones Industrial Average® Index is well behind with a 4.8% gain and the small cap-oriented Russell 2000® Index is up only 1.7%. What’s more, “growth stocks” have outperformed “value” stocks by an extraordinary margin of 14.1 percentage points. The Russell 1000 Growth® Index is up 20.7% while the Russell 1000 Value® Index is up 6.6%.
2024 Q1 Update
Equity markets continued to be kind to investors as we started 2024. Resilient economic growth and reassuring corporate earnings allowed stocks to build upon last year’s gains. Growth-oriented stocks continued to outperform, although market gains were fairly broad. For the first quarter, the S&P 500® Index gained 10.6% to record highs and the Russell 2000® Index advanced 5.2%. Three primary forces seem to be driving markets: the economy, Fed policy and artificial intelligence (AI).
2023 Q4 Update
Equity markets generated surprisingly robust returns in 2023. The S&P 500® Index gained 26.3% for the year and the Russell 2000® Index returned 16.9%. Much of the gains were fueled by a feverish late-year rally. For the fourth quarter alone, the S&P and Russell returned 11.7% and 14.0%, respectively. As you may recall, we came into 2023 with rampant negativity and widespread calls for a recession. While there were hurdles to surmount along the way, markets largely defied the odds and generated very impressive results.
2023 Q3 Update
Stocks seemed to run out of gas in the third quarter. The S&P 500® Index and Russell 2000® Index lost 3.3% and 5.1%, respectively. Most of the losses were concentrated in September, which historically is the worst month of the year for stocks. It wasn’t surprising to see equity markets stall a bit, especially after a surprising first half rally. Even large cap technology stalwarts cooled off as the artificial intelligence (AI) craze seemed to fade. Year-to-date, the S&P and Russell finished the period up 13.1% and 2.5%, respectively.
2023 Q2 Update
The year is halfway over and equity returns have probably surprised many investors. We came into 2023 with predictions for a recession and rampant negativity; yet, the major indices have managed to post impressive gains so far. For the second quarter, the S&P 500® Index and Russell 2000® Index advanced 8.7% and 5.2%, respectively, bringing year-to-date gains to 16.9% and 8.1%. Even more impressive, the tech-heavy NASDAQ 100® Index is up 39.4% year-to-date, the best start to a year for the index since 1985.
2023 Q1 Update
Stocks managed to perform surprisingly well in the first quarter despite the double whammy of hawkish talk from the Fed and turbulence in the banking system. However, it wasn’t always smooth sailing. In early February, the S&P 500® Index was up 9% and looked to be on its way to a swift recovery from 2022 losses. However, this proved too good to be true, as recession fears ultimately resurfaced and prompted stocks to decline from early February to mid-March. After a late-March rally, the S&P 500 and Russell 2000® Index finished the quarter up 7.5% and 2.7%, respectively. Growth-oriented areas like technology (up 21.8%) dramatically outperformed more cyclical sectors such as energy (down 4.7%) and financials (down 5.6%) as recession risks grew.
2022 Q4 Update
We doubt many investors will be very upset about waving goodbye to 2022. Indeed, it was a tough year for stocks as evidenced by declines of 18.1% and 20.4%, respectively, for the S&P 500® Index and Russell 2000® Index. The NASDAQ® Composite was even worse with a 32.5% swoon, and the top four technology companies (Apple, Microsoft, Alphabet and Amazon) lost roughly $3 trillion of value. Of note, this was the worst year for the major indices since 2008. Was all this to be expected after an impressive multi-year run? Some moderation certainly seemed warranted, but it was painful nonetheless.
2022 Q3 Update
Market action was wild in the third quarter, which turned out to be a tale of two halves. We saw an impressive rally from July through mid-August that coincided with hopes of the Federal Reserve backing off restrictive monetary policy. Then, we witnessed a sharp reversal as discouraging inflation data prompted the Fed to become even more resolute in its battle against rising prices. Ultimately, stocks declined for the quarter and returned to their June lows. The S&P 500® Index finished the period down 4.9% and the Russell 2000® Index declined 2.2%. Year-to-date, the S&P and Russell finished September down 23.9% and 25.1%, respectively.
2022 Q2 Update
Stocks were under significant pressure in the second quarter and officially entered bear market territory. The S&P 500® Index and Russell 2000® Index declined 16.1% and 17.2%, respectively, during the quarter and finished the period down 20.0% and 23.4% year-to-date. This is the S&P’s worst first half since 1970. Market conditions are clearly very different from a year or two ago, when risk taking was rampant and asset values were propped up by rock-bottom interest rates and aggressive economic stimulus spawned by the pandemic. Now, we are on the back side of said stimulus and dealing with the challenging cocktail of rampant inflation, higher interest rates and slowing growth.
2022 Q1 Update
The first quarter brought investors yet another curve ball with Russia’s invasion of Ukraine. This sent shockwaves through global markets and added to already notable inflation pressures, while also casting a new light on international investing. Meanwhile, the Federal Reserve raised interest rates as policymakers began to reign in monetary stimulus. Markets ultimately proved more resilient than one might expect given these circumstances, with energy and commodity-related stocks leading the way. While the S&P 500® Index and Russell 2000® Index were down 12% and 14% at one point during the quarter, they finished down 4.6% and 7.5%, respectively. It’s worth noting, however, that the major indices belie underlying weakness in the market. Many stocks, especially in riskier corners of the market, have experienced steep declines.
2021 Q4 Update
Another year is in the books and what a wild year it was. Indeed, 2021 was quite an encore for 2020. We had a riot at the Capitol, vaccine introduction, economic “re-opening”, meme stock rally, the SPAC craze, supply chain snarls, widespread inflationary pressures, the Delta variant and more recently the Omicron variant. Many, including us, thought it would be difficult for investors’ risk appetites to sustain levels reached in late 2020. While some speculative pockets of the market weakened, there was no broad-based let down and we saw surprising gains powered by improved economic growth, accommodative policy and abundant liquidity. The S&P 500® Index finished the year up a stunning 28.7% while the Russell 2000® Index advanced 14.8%. Our equity portfolios also enjoyed solid gains for the year.
2021 Q3 Update
We are three-quarters of the way through 2021, and stocks are holding onto meaningful gains. As of September 30, the S&P 500® Index was up 15.9% year-to-date while the Russell 2000® Index had gained 12.4%. The third quarter itself was a bit more subdued, with the S&P up 0.6% and Russell down 4.4%. We were pleased to see solid relative performance from our portfolios as market conditions became more tumultuous. Stocks initially powered through headwinds associated with the Delta variant, but weakened late in the quarter alongside fears surrounding supply chain disruptions, waning economic stimulus and rising interest rates. In fact, the S&P was down 4.7% for the month of September. We think such a breather may be healthy given the torrid pace of gains through August, when the S&P seemed on pace for a record number of new highs in a year.