Value & Income Portfolio: The Value in Being Contrarian
August 2023
Significant ink and airtime has been devoted to the domination that a few high-growth technology stocks have exerted on US markets in the first half of 2023. The question, in our minds is: what next? Read on as Adam Bergman, Portfolio Manager for the Value & Income Portfolio, lays out the reasons for why we think valuations are looking especially attractive in high-quality dividend paying stocks right now.
Thoughts on AI
June 2023
The introduction of Generative AI platforms such as ChatGPT has sparked an arms race in the Artificial Intelligence industry. Read on as Brian Ward, Research Analyst, dives into the AI landscape, and what the future may hold in this rapidly developing space.
Barron’s: 2 Small Cap Funds That Could Ride the Market’s Next Big Move
May 2023
Are small caps due for a turn-around? The Davenport Small Cap Focus Fund (DSCPX) was recently profiled in Barron’s as one of “2 Small-Cap Funds That Could Ride the Market’s Next Big Move.” Read on to find out why.
Barron’s Live Podcast – Managing Your Money: Finding Small Stocks With Big Prospects
May 2023
Small caps have suffered this year, but the good news for investors is that the weakness has left the sector looking especially cheap. Listen as Davenport Asset Management’s George Smith and Chris Pearson chat with Lauren Foster, Senior Writer of Barron’s to discuss what they look for in companies and stocks they’re excited about.
Click below to listen to the recorded podcast from Barron’s Live.
Evolving Our Process
April 2023
Since 1984, the Investment Policy Committee has guided Davenport Asset Management, and once again, the group’s collaboration is laying the groundwork for future efficiencies and growth with the adoption of new management teams for the Core Leaders and Value & Income Portfolios. Click below to read more about our evolving process.
We Believe the World’s Best Companies are in the Davenport Core Leaders Portfolio
March 2023
We are pleased to announce the rebranding of the Core Portfolio as the Davenport Core Leaders Portfolio. Core Leaders seeks to generate competitive returns by owning a collection of the world’s most established, dominant and durable franchises. Click below to learn more.
A Dividend Advantage
February 2023
For more than 20 years, the Davenport Value & Income Portfolio (VIP) strategy has focused on value opportunities and companies with meaningful dividends and dividend growth potential.
Click below to read how meaningful a role dividends can play in overall performance.
January 2023 Market Update
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.