Benchmark Returns for the Period Ended
June 2021

Quarter Annualized
1 Year 5 Year 10 Year
US Treasury Bills (one month) 0.00% 0.07% 1.07% 0.55%
Barclays Capital US Gov’t/Credit Inter Bond 0.98% 0.19% 2.63% 2.76%
Standard & Poor’s 500 8.55% 40.79% 17.65% 14.84%
Russell 1000 Value (large cap value) 5.21% 43.68% 11.87% 11.61%
Russell 2000 (small cap) 4.29% 62.03% 16.47% 12.34%
Russell 2000 Value (small cap value) 4.56% 73.28% 13.62% 10.85%
MSCI Europe, Australasia and Far East (EAFE) 5.17% 32.35% 10.28% 5.89%
MSCI Europe, Australasia and Far East (EAFE) Small Cap 4.34% 40.98% 12.03% 8.38%
MSCI Emerging Markets 5.05% 40.90% 13.03% 4.28%
Wilshire REIT 12.84% 37.52% 6.36% 9.38%

Quarterly Commentary

The second quarter saw continued strength in equity markets. Real Estate Investment Trusts (REITs) led the way, returning 12.84% (per the Wilshire REIT Index). This was followed by the S&P 500, returning 8.55%. International equities also had positive performance, returning 5.17% for developed markets (per the MSCI EAFE Index) and 5.05% for emerging markets (per the MSCI Emerging Markets Index).

Economic growth continued during the quarter, with demand for goods and services surpassing their pre-pandemic levels in several industries. Housing and commodity prices increased during the quarter due to both supply constraints and pent-up demand. Ironically, some sectors of the economy are struggling to meet growing demand and find qualified employees. Globally, vaccine rollouts are accelerating, especially in Europe. The vaccines have proved effective at reducing severe COVID and hospitalizations from the new strains that continue to develop. These factors led markets to make and break all-time highs for the second quarter in a row.

Of concern to most investors isn’t a lack of strength in the economy, but rather too much strength leading to price increases, otherwise known as inflation. The Federal Reserve has maintained its stance that most of the price increases are temporary. It has also signaled that it will moderate its extraordinary monetary support based on the current pace of economic recovery. We must wait to see how the Fed’s actions will play out over the next 12-months, but there is no question that they did a masterful job navigating the pandemic and ensuing recovery thus far.

Keep in mind that some inflation isn’t a bad thing. It signals that the economy is growing and should lead to higher fixed-income yields. We recently published an article on inflation with additional thoughts and insights: Is It Time for Inflation Risk?

What does this mean for investors? For the most part, concerns about an economy growing too fast seem preferable to slow growth or contraction concerns. Portfolios benefit from the economic strength, evidenced by the 1-year and 5-year returns listed above and in your reports that follow. Our advice? Remain focused on the long-term plan developed with your advisory team and reach out to us if you have any questions or concerns.If you have thought about becoming a client or would like a second opinion on your current holdings, please contact us via the button below and we would be glad to assist you in achieving your financial goals.PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the management of an actual portfolio. The index returns above assume reinvestment of all distributions. This information is for educational purposes only and should not be considered investment advice or an offer of any security for sale.