Inspire Portfolio Strategy Insights

Global & Select Strategy Performance

1. The Global (ETF-centric) strategies slightly underperformed their secular benchmarks for the quarter, while the Select strategies underperformed more significantly.  For the trailing 12-month period, both our Select and Global strategies posted strong absolute results ranging from 10.60% on the conservative side of the spectrum to 20.26% in the all-equity strategies. Despite positive absolute results, the strategies underperformed their respective benchmarks, with the Global strategies outperforming the Select strategies.    
2. On the equity side, our strategies slightly underperformed the MSCI World Index in the quarter, primarily due to our overweight allocation to U.S. small and mid-cap equities. In our Global (ETF-centric) strategies, we experienced positive relative performance coming from WWJD at 4.24% versus 3.12% for the MSCI World Index. This was offset by relative underperformance from PTL (-0.39%), ISMD (-0.11%), and FDLS (2.62%). In our Select models, stock selection within our international developed, U.S. large-cap, and U.S. small-cap strategies also contributed to relative underperformance. Over the trailing 12-month period, both the Global and Select strategies have underperformed, due to our overweight positioning in U.S. small-cap and relative underperformance from the holdings in our U.S. equity sleeves.  
3. On the fixed income side, the bond portion of the 70/30 strategies slightly outperformed the BC U.S. Agg in the quarter by 0.05%, given IBD's shorter duration (4.11 versus 5.9 years) as interest rates declined on the shorter end of the yield curve. Over the trailing 12 months, IBD posted strong absolute results 7.12% but underperformed the BC Agg by only 18 bps, due to the steepening of the yield curve (short end declining and long end modestly rising).

Asset Class Model in the Spotlight: Inspire Emerging Markets Sleeve

The Emerging Markets sleeve outperformed the MSCI Emerging Markets Net TR Index by 3.70% in the fourth quarter. The main contributors in the quarter were the portfolio's stock selection within the consumer discretionary, consumer staples, industrials and utilities sectors. The main contributors within the consumer discretionary sector were Vibra Energia (15.09%) in Brazil, and within the consumer staples sector, the main contributor was Coca-Cola Femsa (16.65%) in Mexico. An overweight position in communication services (which outperformed the overall index) also benefited results. The sleeve also outperformed over the trailing twelve months, returning (42.12%) versus (33.57%) for the index.

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Capital Market Returns

See quarterly review and commentary for more information.

Inspire ETF Returns

See quarterly review and commentary for more information.

Disclosures

Advisory services are offered through Inspire Investing, LLC, a Registered Investment Adviser with the SEC. All expressions of opinion are subject to change without notice and are provided for informational purposes only. Nothing in this commentary should be construed as an offer, solicitation, recommendation, or endorsement of any particular security, strategy, or investment product. Investing involves risk, including the potential loss of principal. Please consult your financial advisor before making any investment decision.

Past performance is not indicative of future results. All performance figures referenced herein are historical and may not reflect current or future market conditions. Actual investor outcomes may vary. There is no assurance that any investment strategy will achieve its objectives or avoid losses.

Inspire Investing, LLC serves as the investment adviser to certain proprietary ETFs used in Inspire portfolios. Inspire receives management fees from these ETFs, creating a potential conflict of interest. Inspire seeks to mitigate this conflict through policies and procedures that ensure recommendations are made in clients’ best interests and consistent with their unique goals and risk profiles. Additional details can be found in Inspire’s Form ADV Part 2A.

Information and data referenced in this commentary may be obtained from third-party sources believed to be reliable, including Bloomberg and MSCI, but Inspire makes no representation as to their accuracy or completeness. All trademarks and service marks are the property of their respective owners.

Certain statements may include forward-looking information based on current beliefs, expectations, and assumptions. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. Inspire undertakes no obligation to update or revise any forward-looking statements.