Trump, Uncertainty, and Markets
March 2025
Markets have been challenging recently, though not significantly so in a historical context. Like him or not, the Trump administration has brought uncertainty to markets. However, it seems to us markets have already discounted significant duress. Read on for our thoughts on navigating this environment, and how this recent pullback may present some discerning opportunities.
Patience and Opportunity with Small Caps
March 2025
Investing alongside our clients through nearly every market cycle America has encountered has taught us the virtues of patience and discipline. The Davenport Small Cap Focus Fund has more than a decade of higher returns with lower risk than the Russell 2000. Read on about our process that, we believe, helps us take advantage of inefficiencies in small cap stocks over time.
Examining the Timeliness of Small Caps
March 2025
It is no secret that the small cap space has been challenging for a historic period of time. While recent underperformance is not a sufficient basis for a bullish thesis on the asset class, we think there are several factors that support improved performance on the horizon. Click below to read more about these factors and why we support the case for small caps going forward.
Financial Planning for Philanthropists
February 2025
Watch this video as Davenport Asset Management hosts Ann Deppman, Assistant Vice President of Planned Giving at VCU, Jason Chestnutt, Executive Director of Planned Giving at VCU, and Lisa Hatcher, Financial Planning Product Manager of Davenport & Company, as they discuss strategies every financial planner and client should consider in their philanthropic endeavors.
2025 Fixed Income Outlook
January 2025
Watch this video as the Davenport Asset Management Fixed Income Team, Kevin Hopkins, Will Cleland, and Emily LaVay discuss how they are prepared to handle interest rate challenges in 2025. Click below to watch the recorded Zoom presentation.
Celebrating a Decade of Success: The Davenport Small Cap Focus Fund
January 2025
We are excited to mark the 10-year anniversary of the Davenport Small Cap Focus Fund (DSCPX). As we celebrate this important milestone, the DSCPX remains committed to investing in high quality, timely situations where we have deep knowledge and differentiated viewpoints. Thank you for your support and trust. Here’s to another decade of success and growth with the Davenport Small Cap Focus Fund!
Welcome 2025!
January 2025
Stocks may have ended 2024 on a sour note, but generally put together a fantastic year. AI, the Fed and the election were the primary drivers. Looking ahead, a higher valuation for the S&P 500® Index argues for more subdued returns and we will watch the ongoing dance between economic growth and the Federal Reserve. We also note many areas of the market are much cheaper than the S&P and think performance leadership change in 2025. Read on for our year-end update and Happy New Year!
Future-Ready: Succession Planning Essentials
October 2024
Watch this video of Davenport Asset Management hosting Katherine Whitney and Scott Warren, Co-founders and Directors of Warren Whitney, as they teach us how to mitigate risks and maintain leadership and organizational continuity through planned and unplanned transitions. Click below to watch the recorded Zoom presentation.
Quarterly Updates
2024 Q4 Update
Let’s start by acknowledging that 2024 was a remarkable year for equity markets. The S&P 500® Index rallied 25.0% and posted its second consecutive year of 20%+ gains. We witnessed one major stumble in the summer and markets closed the year with a bit of a whimper, but the overall outcome was quite impressive. This likely came as a surprise to many investors given geopolitical risks, recession fears, and election anxieties. Over the last two years, the S&P has returned a stunning 58%. Other indices were up in 2024, but not nearly as strong as the tech-fueled S&P. For instance, the small cap-oriented Russell 2000® Index was up 11.5% and the Russell 1000 Value® Index gained 14.4%.
2024 Q3 Update
The third quarter brought more gains to equity investors. The S&P 500® Index returned 5.9% and the Russell 2000® Index advanced 9.3%. Notably, gains broadened to corners of the market other than large cap technology stocks. Year-to-date returns are somewhat staggering in light of persistent calls for economic weakness and market malaise. Incredibly, both the S&P and Dow Jones Industrial Average have been positive for 10 of the last 11 months. The S&P 500 is now up a whopping 22.1% for 2024. Other notable indices are also up nicely, albeit a bit more subdued than the tech-heavy S&P.
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.