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 6.1% on the conservative side of the spectrum to 12.4% 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, the strategies slightly underperformed the MSCI World Index in the quarter due to our overweight allocation to international equities. In our Global (ETF-centric) strategies, we experienced negative relative performance coming from WWJD (3.4%) versus 7.6% for the MSCI World. This was offset by strong relative performance from PTL (9.1%), ISMD (9.5%), and FDLS (10.2%). In our Select models, stock selection within our international developed, US large cap, and US 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 to US small cap and relative underperformance from the holdings in our US equity sleeves.
3. On the fixed income side, the bond portion of the 70/30 strategies slightly underperformed the BC US Agg in the quarter by 0.3% given IBD’s shorter duration (3.5 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 (4.5%) and outperformed the BC Agg by over 1.5%, due to the steepening of the yield curve (short end declining and long end modestly rising).

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Asset Class Model in the Spotlight: Inspire U.S. Mid Cap Sleeve

The US Mid Cap Sleeve outperformed the S&P MidCap 400 in the fourth quarter by 0.5%. The main contributors in the quarter were the portfolio’s stock selection within the consumer discretionary and consumer staples sectors. The main contributor within consumer discretionary was Installed Building Products (37%), and within consumer staples, the main contributor was Celsius Holdings (24%). An overweight position to communication services (which outperformed the overall index) also benefited results. Although the sleeve outperformed over the quarter, it underperformed over the trailing twelve months, returning -0.6% versus 6.1% for the index. The main detractors from performance were stock selection in the healthcare, financials, and information technology sectors.

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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.

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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.