We have put the U.S. presidential election behind us, avoided the worst of the potential outcomes related to the “Fiscal Cliff,” and seen China’s leadership execute an apparently smooth transition of power. Investors seem to finally be adjusting to a world that produces slower economic growth and whose developed country governments have substantial debts to pay. Perhaps the world is ready to move forward, or at least to look forward with a hopeful attitude and put the financial crisis of the prior decade behind its collective psyche. During the fourth quarter, equity markets throughout the world produced positive returns to finish a strong year and Portfolio 21’s results were superior to the benchmark.
The investment team at Portfolio 21 spends its time researching individual companies. We are searching throughout the world for companies we believe are leaders in managing their businesses to mitigate environmental harm and that are also capable of…
During the third quarter, we completed our annual review of the environmental practices of each of the companies owned in the Portfolio 21 Fund, a process that we have adhered to and built upon since the Fund’s inception in 1999. Also, the Fund had a fine quarter for investment returns, essentially keeping pace with the strong rise in global equity markets. As the Advisor to the Fund, we are pleased to provide this update on our investment management activity and on our recent and longer-term investment results.
Performance Review: The market comes our way – this quarter.…
The Fund matched strides with its benchmark, the MSCI World Equity Index, during what turned out to be a strong run for stock prices during the quarter. Even though not much has changed for the better in terms of global economic growth, the market rose when the U.S Federal Reserve and other major
Investors shifted into a “risk off” mode in the second quarter as macro-economic data throughout the world continued to deteriorate. There are recessions across most of Europe, a softening economy in the U.S. in which gross domestic product growth is less than deficit growth, and slowing growth in emerging economies.
Portfolio 21’s second-quarter performance trailed that of the MSCI World Equity Index, as returns were inhibited by a lower-than-benchmark allocation to U.S. equities. Being overweight cyclical economic sectors also detracted from fund performance. This was somewhat offset by an under-allocation to the energy and financial services sectors. Portfolio 21 lost 6.4% for the first quarter, while the MSCI World declined a lesser 4.85%.
Fund operating fundamentals tells a more heartening tale of performance. Portfolio 21 companies as a group have experienced above average earnings growth statistics, as well as higher returns-on-equity. Five-year geometric earnings growth for Portfolio 21
Equity investors saw the best start to the year in more than a decade as the bull market entered its fourth year, leaving investors wondering how much higher stocks can go. Stocks have rallied on the back of improving U.S. economic data and progress toward a solution to the debt crisis in Europe. However, some worry that the rise in oil prices could shock the global economy and stifle the stock market.
Portfolio 21’s first quarter performance trailed that of the MSCI World Equity Index, as returns were inhibited by a lower-than-benchmark allocation to financial services and consumer discretionary stocks. Being underweight Japanese equities also detracted from fund performance, although exposure to other Asian markets, including South Korea, Singapore, and Hong Kong helped to offset impact. Portfolio 21 gained 10.05% for the first quarter, while the MSCI World Equity Index rose 11.72%.
See Portfolio 21's complete standardized performance…
Global stocks wrapped up 2011 by posting their first annual loss in three years. Markets in 2011 were characterized by periods of intense volatility and surging bond yields in the euro zone periphery. The year began with high hopes of an improving U.S. economy, which drove stocks to a peak at the end of April. But worries about Europe’s debt woes increased as investors fretted about contagion.
Portfolio 21’s 2011 and fourth quarter performance trailed that of the MSCI World Equity Index, as returns were inhibited by a higher-than-benchmark allocation to foreign stocks. Lack of energy exposure throughout 2011 and an underweighting of consumer staples stocks in the fourth quarter also detracted from fund performance. Portfolio 21 lost 7.78% for the year and gained 5.67% in the quarter. The MSCI World Equity Index fell 4.98% and rose 7.74%, respectively.
See Portfolio 21's complete standardized performance. Performance data …
Many national equity markets entered into a bear market over the period as volatility spiked on worries over economic growth and sovereign debt issues. The macroeconomic environment is hostile and it may get nastier still. The U.S. recovery is faltering two years after the biggest slump since the Great Depression. Economic data is suggesting slow growth and many are concerned the slowdown could last years rather than months.
Portfolio 21's third quarter performance matched that of the MSCI World Equity Index. Fund returns were inhibited by a higher-than-benchmark allocation to foreign markets, while performance was enhanced by a higher allocation to defensive economic sectors and companies.
See Portfolio 21's complete standardized performance. Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more …
The "risk on, risk off" pattern and the "herd" mentality dominated trading again during the second quarter, with stocks, currencies, and commodities moving in response to macroeconomic events. Most of the economic data released last quarter was disappointing, especially at the back end. The global economy is struggling to withstand the combination of rising energy prices, the aftermath of Japan's earthquake, U.S. fiscal woes, a slowdown in China, and Europe's sovereign-debt crisis. Despite these challenges, U.S. stocks managed to end the quarter near flat, but slightly positive. European stock markets lost a bit as worries about Greece regained momentum; Japanese stocks experienced minor gains due to rebuilding confidence. Most emerging market indices declined. Indian stocks were the worst performers among Asian markets. Investors fretted about high inflation and risks to growth resulting from the Reserve Bank of India's steep hikes in interest rates over the past fifteen months.
The S&P 500 Index is a broad-based unmanaged index of 500 stocks, which is widely recognized as representative of the U.S. equity market. One cannot invest directly in an index.