2022 3Q Letter to Investors: Races are Won in the Turns
October 14, 2022: The title of this letter is an auto racing adage that aptly applies to investing. It highlights that much more than in the straightaways, it is in the turns, both entering and coming out of them, where drivers differentiate themselves.
2022 2Q Letter to Investors: YTD Sell-Off Drives Rotation
July 19, 2022: On measures of free cash flow, stocks have gotten notably less expensive in the first six months of 2022, and the first chart highlights the free cash flow yield now expected for both the U.S. FSV strategy and the S&P 500.
Equity & Bond Valuations & Inflation
May 21, 2022: Amid an uncertain economic future, equities offer an attractive advantage of being able to pass through inflationary costs over the longer-term, but their present relative valuation against bonds does not seem to fully capture the benefit as it did historically.
2022 1Q Letter to Investors: Differing Drivers of Returns
April 11, 2022: In the first quarter of 2022, each of Distillate’s strategies (U.S. FSV, Intl. FSV, and Small QV) outperformed their primary benchmarks. Crucially, performance both recently and over prior years has resulted from a very different driver of price gains compared to the market.
2021 Year-End Letter to Investors: Value Below the Surface
January 16, 2022: Distillate’s U.S. Fundamental Stability & Value (U.S. FSV) strategy outperformed its S&P 500 and iShares Russell 1000 Value ETF benchmarks again in 2021. For a further discussion of performance, portfolio changes, and more, please see our Year-End 2021 letter.
Concentration Risk
The largest 5 stocks in the S&P 500 Index accounted for 22% of its value at the end of last month vs. under 12% five years earlier. In this one-pager, we look at how rising relative valuations were the predominant driver of this shift.
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