II-Quality @II-Quality: "Market Outlook and tactical allocation..."

Smart Portfolio

Market Outlook and tactical allocation moves Markets continue to digest a complex macro environment dominated by rising tariff risks, geopolitical fragmentation, and tightening financial conditions. The latest trade policy shifts have especially affected globally integrated sectors such as consumer technology, semiconductors, and discretionary goods — areas heavily dependent on global supply chains and cost-sensitive production models. On the other hand, defensives, high-quality service providers, and domestically oriented software companies have shown relative resilience in this new regime. In response, we’ve adjusted our portfolio positioning to reflect today’s market realities. During recent volatility, we’ve actively trimmed exposure to the most globally sensitive sectors and redeployed excess cash into companies with strong fundamentals, stable demand profiles, and lower sensitivity to tariff shocks. Recent purchases include $ACN (Accenture PLC) $DUK (Duke Energy Corp) Evergy $MMC (Marsh & McLennan Cos Inc) & McLennan, $INTU (Intuit Corp) and $JKHY (Jack Henry & Associates Inc) — all of which offer either defensive cash flow stability, essential business models, or consistent growth potential supported by secular trends. This rebalancing underscores our commitment to capital preservation without sacrificing long-term opportunity. We remain selective, focusing on high-conviction names that we believe can weather short-term disruptions while still compounding over the long term. In an environment where policy decisions drive volatility, our portfolio is built to stay resilient — and ready to adapt. Our @II-Quality portfolio is down just over 5% year-to-date, compared to a 14% decline in the S&P 500. We are pleased with this 9 percentage point outperformance, which reflects our focus on quality and defensive positioning. However, our goal remains to bring the portfolio back into positive territory over the course of the year, assuming that the escalating trade war under President Trump does not lead to a full-scale breakdown in equity markets.