| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Q1 2026 proved challenging for equity investors as markets navigated rotational crosswinds from Middle East conflict and AI disruption concerns. The closure of the Strait of Hormuz disrupted 20% of global oil supply, driving WTI crude from $57 to $101 per barrel and benefiting energy, materials, and utilities sectors. Conversely, AI continued pressuring technology valuations as investors began pricing it as a disruptor rather than productivity tool, with software particularly affected. Value stocks meaningfully outperformed growth, with the Magnificent 7 declining roughly 12% on average. The Federal Reserve held rates steady at 3.50-3.75% while adopting a more cautious tone as inflation expectations rose due to energy price spikes. International markets outperformed US equities, with emerging markets showing resilience. Fixed income faced headwinds from rising yields and wider credit spreads. Gold served as a safe haven, rising to $4,511 per ounce. The quarter highlighted the ongoing tension between technological disruption and traditional value creation in an increasingly uncertain geopolitical environment.
Q1 2026 was characterized by significant market rotation driven by Middle East conflict and AI disruption concerns, with energy and defensive sectors outperforming while growth and technology stocks declined amid valuation compression and geopolitical uncertainty.
The document suggests continued uncertainty around geopolitical tensions, monetary policy, and the impact of AI on traditional business models. Energy markets remain volatile pending resolution of Middle East conflicts. Central banks are adopting more cautious stances as inflation risks persist.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 29 2026 | 2026 Q1 | - | AI, energy, Geopolitical, gold, growth, inflation, rates, value | - | Q1 2026 saw dramatic market rotation as Middle East conflict drove oil prices from $57 to $101 while AI disruption fears hammered technology stocks. Value crushed growth with energy leading and software lagging. Fed stayed hawkish amid rising inflation. International markets outperformed US equities. Gold surged as safe haven demand intensified. |
| Jan 18 2026 | 2025 Q4 | - | commodities, gold, healthcare, inflation, Stagflation, TIPS, Utilities | - | RVK outlines investment strategies for stagflationary environments where stagnant growth meets persistent inflation. Traditional assets struggle simultaneously, making precious metals, commodities, TIPS, and floating rate debt attractive alternatives. Defensive equities in consumer staples, utilities, and healthcare offer relative outperformance through pricing power. Diversified approaches across multiple asset classes provide better protection than single-regime optimization. |
| Sep 30 2025 | 2025 Q3 | - | AI, China, fixed income, gold, Hedge Funds, monetary policy, real estate, Trade Policy | - | Q3 2025 markets rallied on Fed rate cuts, trade agreements, and continued AI momentum. The Russell 3000 gained 8.2% with small-caps outperforming large-caps. Chinese tech stocks drove emerging markets higher while gold surged to $3,887. Mixed economic signals included weakening labor markets and above-target inflation, but accommodative policy expectations supported risk assets across sectors. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIAI continued to pressure stock valuations perceived as threatened by technology, particularly in the software industry. Investors began to price AI not as a complementary productivity tool but as a potential disruptor of long-term terminal values. Capital expenditures related to AI are expected to reach approximately $700 billion in 2026 versus approximately $400 billion in 2025. |
Software Technology Disruption Valuations |
OilThe closure of the Strait of Hormuz disrupted approximately 20% of global oil supply from transit, triggering a surge in energy prices. WTI crude oil surged from $57 to $101 per barrel. The Iran conflict generated immediate supply shocks and second-order effects throughout the quarter. |
Energy Supply Geopolitical Iran | |
InflationInflation data initially showed progress with CPI running near 2.4% year-over-year early in the quarter, but the spike in oil prices late in February and March reversed the moderating trend. Central banks responded cautiously as higher oil prices lifted short-term yields and inflation expectations. |
CPI Energy Central Banks Monetary Policy | |
RatesThe US Federal Reserve held the federal funds target range steady at 3.50–3.75% adopting an increasingly cautious tone. Treasury yields rose sharply late in the quarter with the 10-year Treasury yield climbing above 4.3%. Expectations for cuts to the Federal Funds rate in 2026 declined from two to zero. |
Federal Reserve Treasury Monetary Policy Yields | |
GoldGold prices moved significantly higher in reaction to geopolitical tensions, acting as a safe haven asset. Gold spot price rose from $4,325 to $4,511 per ounce during the quarter as investors sought protection amid Middle East conflict and market volatility. |
Safe Haven Geopolitical Precious Metals | |
| 2025 Q4 |
GoldGold has historically been one of the most reliable assets during stagflation conditions. As a tangible, finite resource with intrinsic value, gold is not tied to any single economy or currency. During the 1970s stagflation, gold prices soared, reflecting its role as a hedge against both inflation and systemic risk. |
Precious Metals Inflation Hedge Store of Value |
CommoditiesCommodities have the potential to provide the most direct protection against inflation. Energy prices tend to rise during inflationary periods, especially when supply is constrained. Agriculture commodities may also be a consideration for investors, as food prices often rise during inflationary periods. |
Energy Agriculture Inflation Protection | |
InflationThe document explores an economic regime marked by stagnant real growth, persistent inflation above targets, and rising unemployment. This type of environment poses unique challenges for investors as high inflation erodes purchasing power while stagnant growth and high unemployment can suppress consumer demand and corporate earnings. |
Stagflation Economic Regime Policy Dilemma | |
Private CreditMost private credit is floating rate in nature. While less tested in prior environments and subject to credit risk, private credit may behave in similar fashion to other forms of floating rate debt during inflationary periods when central banks raise policy rates. |
Floating Rate Credit Risk Interest Rates | |
InfrastructureInfrastructure offers predictable cash flows and protection against inflation, making it a potentially attractive allocation for investors concerned about stagflation. In many cases, the long-term contracts tied to reputable or regulated counterparties will include payment adjustments based on inflation. |
Cash Flows Inflation Protection Regulated | |
| 2025 Q3 |
AIAI and semiconductors continued to play a significant role in bolstering equity returns during Q3. Chinese technology stocks rallied due to ongoing AI enthusiasm, contributing to emerging markets performance. AI themes remained central to market performance alongside cloud computing. |
Artificial Intelligence Technology Semiconductors Cloud Computing Chinese Tech |
RatesThe Federal Reserve delivered its first rate cut of the year in September, lowering the policy rate by 25 basis points to 4.00%-4.25%. The Fed framed this as risk management rather than the start of rapid easing, with median expectations for two additional cuts in 2025. |
Federal Reserve Interest Rates Monetary Policy Rate Cuts FOMC | |
Trade PolicyTrade agreements between the US and several major partners were announced during Q3, contributing to market gains. However, tariff negotiations impacted certain commodities like agriculture, and India faced tariffs and H-1B visa fee impacts. |
Trade Agreements Tariffs US Trade H-1B Visas Trade Tensions | |
ChinaChinese technology stocks continued their rally due to AI enthusiasm, leading emerging markets higher. However, China still faces headwinds from property sector debt overhang and subdued domestic consumer demand, implementing incremental rather than broad-based stimulus. |
Chinese Equities Property Sector Consumer Demand Fiscal Stimulus Technology Stocks | |
GoldGold prices rose sharply during Q3, reaching $3,887 per ounce by quarter-end, up from $3,303 in Q2. Gold exposure contributed positively to Global Tactical Asset Allocation strategies and Diversified Inflation Strategy managers. |
Gold Prices Precious Metals Inflation Hedge Asset Allocation Commodities | |
Commercial Real EstateCore private real estate generated positive 0.7% total return in Q3, marking the fifth quarter of positive returns after significant correction beginning Q4 2022. Real estate pricing appears to have neared a bottom for most sectors, though uncertainty around trade and policy has left businesses reluctant to commit to leases. |
Private Real Estate NFI-ODCE REITs Commercial Property Real Estate Pricing |
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