| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Confluence's asset allocation strategies maintain a risk-managed approach centered on capturing upside from expected economic expansion while hedging against geopolitical uncertainty. The firm expects no recession over the three-year forecast period, with GDP growth driven by business investment, particularly in AI and technology sectors. Anticipated Federal Reserve rate cuts should stimulate the economy and address weakening labor markets, though inflation is likely to remain around 3%. Portfolio positioning favors large cap domestic equities over mid-caps, benefiting from passive flows and supportive fiscal policy. International developed markets offer attractive valuations and should benefit from fiscal spending and dollar weakness. The strategies maintain gold positions as a hedge against geopolitical risks and dollar diversification trends. Fixed income allocations emphasize intermediate-maturity Treasuries and mortgage-backed securities, positioned for the expected dovish policy pivot. Defense sector exposure provides additional geopolitical hedging. Dividend-focused ETFs across equity allocations offer support in the expected higher-volatility environment. This balanced approach aims to capture growth opportunities while managing downside risks through diversification.
Confluence maintains a risk-managed asset allocation approach emphasizing large cap domestic equities and international developed markets, supported by accommodative monetary policy expectations and continued business investment growth, while hedging geopolitical risks through gold positions and defense sector exposure.
We expect no recession over our three-year forecast period, with GDP growth near trend, driven increasingly by business investment. Anticipated fed funds rate cuts will stimulate the economy and address weakening labor markets. Inflation is likely to remain around 3%, above the Fed's long-term target. Passive flows continue to support domestic equities, primarily benefiting large cap stocks. International developed equities are expected to benefit from government fiscal spending, attractive valuations, and a weakening dollar.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 6 2026 | 2025 Q4 | - | CashFlow, dividends, income, inflation, real assets | - | The commentary emphasizes income-oriented investing through dividends, real assets, and fixed income amid slowing growth and moderating inflation. Portfolio positioning reflects a focus on cash-generating assets with inflation resilience and downside protection. Income is positioned as a stabilizing return source as markets transition away from liquidity-driven growth. |
| Oct 6 2025 | 2025 Q3 | - | asset allocation, defense, dividends, Europe, gold, international, risk management | - | The letter discusses a late-cycle macro environment shaped by fiscal deficits, sticky inflation risks, and shifting monetary policy. Elevated valuations leave markets vulnerable to policy errors and geopolitical shocks. A diversified, valuation-aware approach is emphasized as macro uncertainty rises. |
| Jul 21 2025 | 2025 Q2 | - | asset allocation, diversification, Macro, risk management, uncertainty | - | The letter centers on uncertainty, emphasizing the impossibility of precise macro forecasting in complex systems. Portfolio construction is framed around diversification across assets and economic outcomes to manage risk. Diversification is positioned as the most reliable response to unpredictable policy and market shocks. |
| Apr 15 2025 | 2025 Q1 | - | - | - | |
| Jan 29 2025 | 2024 Q4 | - | - | - | |
| Sep 30 2024 | 2024 Q3 | - | - | - | |
| Jul 17 2022 | 2024 Q2 | - | - | - | |
| May 15 2024 | 2024 Q1 | - | - | - | |
| Jan 23 2024 | 2023 Q4 | - | - | - | |
| Oct 19 2023 | 2023 Q3 | - | - | - | |
| Jul 18 2023 | 2023 Q2 | - | - | - | |
| Apr 17 2023 | 2023 Q1 | - | - | - | |
| Jan 30 2023 | 2022 Q4 | - | - | - | |
| Oct 31 2022 | 2022 Q3 | - | - | - | |
| Jul 30 2022 | 2022 Q2 | - | - | - | |
| Mar 31 2022 | 2022 Q1 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Income |
|
| 2025 Q3 |
Defense SpendingThe entire world is rapidly rearming off an extremely low base of defense spending. This exposure focuses on companies that make armaments for nation state security and materially outperformed for the year. |
Defense Armaments Rheinmetall Palantir RTX |
DividendsJapanese companies paid record dividends of ¥18 trillion for fiscal year ending March 2025, a 13.8% year-over-year increase. Many major firms have adopted progressive dividend policies guaranteeing dividends will never be cut, only maintained or increased. |
Progressive Dividend Record Payouts Shareholder Returns Yield Growth | |
EuropeThe firm is expanding European relationships and published research on European shareholder activism. They view Europe as an attractive alternative to expensive American markets and are building manager relationships in the region. |
Activism Shareholder Valuation Diversification Research | |
GoldGold returned +65% in dollars in 2025, driven by broadening demand from central banks, professional and retail investors. Central banks now hold 24% of reserves in gold versus 23% in US Treasuries for the first time. Maintained 12% portfolio allocation throughout the year. |
Central Banks Reserves Diversification Demand | |
Trade PolicyRecent tariff policies continued to negatively impact U.S. consumers and companies throughout the year. However, international companies have been finding new trade arrangements and growth opportunities, benefiting from shifts in global trade patterns as the new U.S. administration alters terms of international cooperation. |
Tariffs International Growth Cooperation Impact | |
| 2025 Q2 |
DiversificationThe Fund remains purposefully diversified despite market leadership being narrow and focused on AI. This discipline reflects commitment to effective risk management and appropriate diversification, which weighed on relative performance but positions the Fund well for various market scenarios. |
Risk Management Portfolio Construction Concentration |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| No ticker commentary found. | |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
