All our Global (ETF-centric) and Select strategies outperformed their secular benchmarks for the quarter. The higher the allocation to equities, the better the relative performance. For the trailing 12-month period, both our Select and Global strategies posted strong absolute results ranging from 16% on the conservative side of the spectrum to over 26% in the all-equity strategies. Despite strong absolute results, the strategies underperformed their respective benchmarks, with the Global strategies slightly outperforming the Select strategies.
On the equity side, the strategies outperformed the MSCI World Index in the quarter primarily due to our overweight allocation to small-cap and international equities. For example, in our Global (ETF-centric) strategies, we experienced strong relative performance coming from WWJD (10.0%), ISMD (9.7%), and BLES (8.7%) versus 6.4% for the MSCI World. PTL (7.8%), BIBL (7.2%), and FDLS (6.5%) outperformed as well, although to a smaller degree. In our Select models, stock selection within our US Large and US Mid-Cap sleeves also contributed to relative outperformance. Over the trailing 12-month period, the strategies have underperformed, given our overweight to small cap and international equity, both of which underperformed. In addition, the lack of exposure to the large mega-cap stocks (due to our BRI screens) significantly detracted from results both in our Global and Select strategies.
On the fixed income side, the bond portion of the 70/30 strategies underperformed the BC US Agg in the quarter by 0.9%, given IBD’s shorter duration (4.1 versus 6.2 years) as interest rates declined across the maturity spectrum. Over the trailing 12 months, IBD posted strong absolute results (10.8%) but underperformed the BC Agg by 0.7%, again due to IBD’s shorter duration.
The U.S. large cap sleeve outperformed the S&P 500 Index by over 3% in the quarter. The majority of the three-month outperformance was due to stock selection within the communication services sector. Cogent Communications (+36%) and Iridium (+15%) significantly outperformed the index’s communication names (+1.7%). The portfolio’s overweight to real estate (+17%) also benefited results. Over the trailing twelve months, however, the sleeve has underperformed by nearly 12% due primarily to stock selection within the technology and communication services sectors. Not owning “Magnificent Seven” stocks Nvidia (+179%), Meta (+91%), and Netflix (+88%) due to our BRI screens alone detracted nearly 4% from results. The portfolio’s underweight to technology (+52.7%) and overweight energy (+0.9%) also hurt performance for the year.
See Quarterly Review and Commentary for more information.
See Quarterly Review and Commentary for more information.
Darrell Jayroe, CFA, CFP, CKA, serves as Inspire’s Senior Portfolio Manager responsible for leading the firm’s Investment Committee, as well as serving as Lead Portfolio Manager for Inspire’s ETFs and SMA strategies. Darrell has been with the firm since 2016.
Prior to joining Inspire, Darrell was a Vice President and Sr. Portfolio Manager for the Bank of Oklahoma trust department for 12 years where he was responsible for managing accounts for high net worth families, trusts, foundations and institutions. Darrell started his career as an investment advisor in 1994 with PaineWebber in Oklahoma City.
Darrell received a B.A. and Masters degree from Southern Nazarene University in Bethany, Oklahoma. He is a CFA (Chartered Financial Analyst) charter holder and is a CFP® (Certified Financial Planner®) licensee. He is a member of the CFA Institute and a member and Past President of the CFA Society of Oklahoma. He is also a member of Kingdom Advisors and holds the CKA® (Certified Kingdom Advisor®) designation.
Darrell and his wife, Beth, have been married since 1982 and have two daughters, a son in law and two grandchildren.
Tim Schwarzenberger, CFA is a Portfolio Manager with Inspire Investing and has over 17 years of experience. Tim previously served as the Managing Director at Christian Brothers Investment Services where he was responsible for implementing the firm’s overall investment philosophy through manager selection as well as strategy and product development.
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