There are no changes to Northlake’s thematic strategies as we head into June.  We still have a preference for large cap and value and continue to like international exposure which tilts much more toward value than the major U.S. indices that are dominated by large cap growth stocks in technology industries.  Our recommendations of large cap and value are confirmed by the latest updates from our Market Cap and Style models.  Current ETF holdings in the S&P 500 (SPY), Russell 1000 Value (IWD), Russell 2000 Value (IWN), Developed International (EFA/VEA), and Emerging Market (EEM/VWO) will continue to be held.  We also still like economic sector exposure to financials (XLF), industrials (XLI), and health care (XLV).

Last week, we sent an interim market update via email.  Here is a link to that commentary:

https://northlakecapital.com/2022/06/01/market-commentary-may-25-2022/

 

Since we published the commentary, the market has rebounded sharply.  We believe the rebound could prove significant and that a low for the year might be in place.  There was better news on the fundamental and technical fronts that contributed to the rally.  However, there has yet to be a positive resolution to the many headwinds the market faces including monetary policy, inflation, COVID in China, the war in Ukraine, and slowing economic and earnings growth.  We expect continued elevated market volatility in both directions over the summer but still believe the market will be materially higher at yearend than it is today.

SPY, IWD, EEM, VWO, EFA, VEA, XLI, XXLV, SLF and IWN are widely held by clients of Northlake Capital Management, LLC, including in Steve Birenberg’s personal accounts.  Steve is sole proprietor of Northlake, a registered investment advisor. Northlake’s regulatory filings can be found at www.sec.gov.