Inspire Portfolio Strategy Insights

Global & Select Strategy Performance

1. The Global (ETF-centric) strategies modestly underperformed their secular benchmarks for the quarter, while the Select underperformed by a wider margin. For the trailing 12-month period, both our Select and Global strategies posted strong absolute results ranging from 10.1% on the conservative side of the spectrum to 26.7% in the all-equity strategies. The Global strategies outperformed their respective blended benchmarks over the past year, while the Select strategies performed in line.    
2. On the equity side, our strategies modestly underperformed the MSCI World Index in the quarter. In our Global (ETF-centric) strategies, we experienced strong positive performance coming from BIBL (22.9%) and ISMD (25.4%). This was offset by weaker performance coming from WWJD (4.4%).  PTL (14.6%) and FDLS (14.6.%) end the quarter just ahead of the MSCI World Index (13.8%). In our Select models, stock selection within our international developed, emerging markets, and U.S. large-cap sleeves detracted from performance. In contrast, stock selection and overweight allocations to U.S. mid and U.S. small contributed to performance vs the blended benchmarks. Over the trailing 12-month period, both the Global and Select strategies have outperformed or performed in line with their respective blended benchmarks, due to our overweight positioning in U.S. small-cap equities, as well as outperformance from individual holdings.      
3. On the fixed income side, the bond portion of the strategies outperformed the BC U.S. Agg in the quarter by 0.27%, given IBD's shorter duration (4.0 versus 5.9 years) as Treasury yields moved modestly higher across much of the yield curve amid persistent inflation concerns and a more cautious Federal Reserve outlook. Over the trailing 12 months, IBD posted a return of 3.6%, roughly in line with the 3.8% return of the BC Agg.

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Asset Class Model in the Spotlight: Inspire International Developed

The Inspire International Developed sleeve underperformed the MSCI EAFE Index during the quarter, returning 4.6% versus 10.8% for the benchmark. The underperformance was driven by both sector allocation and security selection. Sector positioning detracted primarily from the portfolio's relative exposure to Energy, Information Technology, and Utilities, while security selection within the sleeve was weakest in the Financials, Information Technology, and Materials sectors. Differences in country exposure, particularly the portfolio's allocations to Canada and select emerging markets relative to the MSCI EAFE Index, also weighed on relative performance during the quarter. Over the trailing twelve months, the sleeve returned 16.36% versus 20.23% for the benchmark.

Despite the recent underperformance, we remain constructive on the long-term outlook for developed international equities. Compared to U.S. equities, international markets continue to trade at more attractive valuations while offering exposure to many world-class companies across a broad range of industries. We believe these characteristics provide an attractive opportunity for long-term investors. Within the sleeve, we continue to emphasize companies with attractive valuations and stronger Inspire Impact Scores that meet our values-based investment criteria. From an overall portfolio perspective, we believe maintaining a meaningful allocation to international developed equities enhances diversification and positions the portfolio to benefit should market leadership broaden beyond the narrow group of U.S. mega-cap stocks that has driven returns in recent years.

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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.