First Quarter Update 2025
Portfolio Commentary
January - March 2025
Author: Kodiak Capital Advisors LLC
Report Coverage: Previous quarter
Published: Apr 8, 2025
Portfolio Summary
• Portfolio return for the previous quarter (January 1, 2025 - March 31, 2025): 1.44%
• Asset class concentration:
Equities: 82.49%
Cash: 9.10%
Real Estate: 5.71%
• Sector concentration:
Technology: 34.45%
Energy: 13.35%
Consumer Non-Cyclicals: 9.20%
• Regional concentration:
North America: 84.56%
South America: 8.98%
Europe: 3.94%
• Top 5 positions by concentration:
VISA INC-CLASS A SHARES (V): 10.46%
MASTERCARD INC - A (MA): 10.09%
ECOPETROL SA-SPONSORED ADR (EC): 5.74%
ALTRIA GROUP INC (MO): 4.80%
NVIDIA CORP (NVDA): 4.76%
• Top contributor to performance: ECOPETROL SA-SPONSORED ADR (EC) with 1.41% contribution
• Top detractor from performance: NVIDIA CORP (NVDA) with -1.11% contribution
• Energy sector had the highest positive contribution to performance at 2.45%
• Technology sector, despite being the largest concentration, contributed -0.77% to performance
• Cash holdings had a negative contribution of -1.86% to performance
Portfolio News and Trends
• Broad market performance: The S&P 500 TR Index declined by 4.27% in the previous quarter, indicating a challenging environment for US equities (2). However, international markets performed better, with the iShares MSCI EAFE Index gaining 8.09%, suggesting stronger performance in developed markets outside the US.
• ETF performances by Style and Sector:
Value outperformed growth, with the Russell 1000 Value Index gaining 2.13% while the Russell 1000 Growth Index declined by 10.11%. Energy (XLE) and Health Care (XLV) were the best-performing sectors, with gains of 9.94% and
6.54% respectively (3). Consumer Discretionary (XLY) and Technology-heavy NASDAQ 100 (NDX) were among the worst performers, declining by 11.75% and 8.07% respectively.
• Best and worst-performing sectors: Energy (XLE) was the top-performing sector with a 9.94% gain,
while Consumer Discretionary (XLY) was the worst-performing sector with an 11.75% decline.
• Bond Performance: Most bond ETFs showed positive returns, with iShares Barclays Aggregate
Bond (AGG) leading at 2.74%. The iShares National Muni Bond (MUB) was the only underperformer in this category, with a slight decline of 0.53%.
• Top contributors and detractors:
Ecopetrol (EC) was the top contributor, benefiting from strong oil prices and outperforming its peers in the Oils-Energy sector (15).
Visa (V) and Mastercard (MA) also performed well, likely due to increased digital payment adoption (9) (7).
NVIDIA (NVDA) was the largest detractor, possibly due to concerns about high valuations in the tech sector.
NIKE (NKE) faced challenges related to inventory management and reported its worst footwear revenue in over a decade (14).
• Recent developments and portfolio impact:
The shift from growth to value stocks likely influenced the portfolio's performance and may continue to shape investment strategies.
Altria Group (MO) demonstrated resilience despite challenges in the tobacco industry, benefiting from strong pricing power and focus on smoke-free products (4) (11).
Visa's strategic acquisitions and technological innovations, such as the Visa Web3 Loyalty Engagement solution, position it well for future growth (5).
• Broader market trends:
There's a noticeable rotation from growth to value stocks, which could impact technology and consumer discretionary sectors. International and emerging markets outperformed US equities, suggesting potential opportunities for geographic diversification. The bond market provided some stability during the period of equity market volatility, highlighting the importance of a balanced portfolio. Ongoing macroeconomic challenges, including inflation concerns and potential interest rate changes, continue to influence market dynamics across various asset classes and sectors.
Macro Update
Overall economic activity rose slightly, with mixed performance across districts (1)
Consumer spending decreased, showing increased price sensitivity for discretionary items, particularly among lower-income shoppers (1)
Manufacturing activity exhibited slight to modest increases across a majority of Districts (1)
Employment nudged slightly higher, with labor availability improving in many sectors (1)
Wage growth slowed to a modest-to-moderate pace, with several Districts noting that wage pressures were easing (1)
Prices increased moderately in most Districts, with input costs rising faster than sales prices, particularly in manufacturing and construction (1)
The Federal Reserve maintained its target range for the federal funds rate at 4-1/4 to 4-1/2 percent (2)
Beginning in April, the Federal Reserve will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion (2)
Economic uncertainty has increased, with many businesses expressing concern about tariffs and changes in trade policies (1)
Inflation remains somewhat elevated according to the Federal Reserve (2)
Economic and Market Outlook
US Economy Defies Expectations, Outpaces Global Peers
IMF raises US growth outlook for 2025 to 2.7%, while downgrading eurozone and
Germany (1)
Strong consumer demand and supportive financial conditions drive US economic
momentum (1)
Betting markets show 56% probability of at least one quarter between 2025-2028 with GDP growth exceeding 5% (1)
Tech Sector Drives Innovation Amid Market Fluctuations
ChargePoint leads US EV charging network market with 32% share, outpacing Tesla (2)
Nvidia GTC conference expected to showcase new AI chips, driving investor enthusiasm (7)
Quantum computing gaining significant investor interest, with potential market impact (7)
Policy Shifts and Geopolitical Tensions Shape Market Landscape
Trump's first day in office brings executive orders impacting immigration, energy, and global agreements (4)
Potential changes in US-Canada trade relations with proposed tariff increases (4)
Trump's SEC pick, Paul Atkins, pledges new approach towards crypto regulation (8)
Market Volatility Persists Across Various Sectors
Bitcoin and crypto market experiences 9% correction, shedding close to $1.5 billion in liquidations (5)
MongoDB's weak FY26 guidance leads to significant stock price drop (6)
Oil giant BP reduces workforce by 5% to achieve $2 billion in savings (3)
Data Powered by
Sources
Portfolio News and Trends
2) Benzinga Breaking News | S&P 500 Scaled A Record 57 All-Time Highs In 2024: Here's What
Analysts Think Is In Store This Year
3) Zack's Investment News Wire | 4 Stocks to Watch From the Robust Business-Software Services
Industry
4) Zack's Investment Research | MO: Altria Group, Inc
5) Zack's Investment Research | V: Visa Inc
7) Zack's Investment News Wire | MasterCard (MA) Beats Q4 Earnings and Revenue Estimates
9) Zack's Investment News Wire | Visa (V) Tops Q1 Earnings and Revenue Estimates
11) Zack's Investment Research | MO: Altria Group, Inc
14) Benzinga Breaking News | Bill Ackman-Backed Nike Reports Worst Footwear Revenue In More
Than A Decade, Takes Action To Continue 'Liquidating Inventory' Amid Grim Outlook
15) Zack's Investment News Wire | Is Ecopetrol (EC) Stock Outpacing Its Oils-Energy Peers This Year?
Macro Update
- Beige Book | Beige Book
- FOMC meetings | Federal Reserve issues FOMC statement
Economic and Market Outlook - Benzinga Breaking News | IMF Lifts US Growth Outlook, Betting Markets Raise Odds On Trump-
Led Economic Boom - Benzinga Breaking News | ChargePoint Outpaces Tesla In EV Network Market Share, But
JPMorgan Stays Cautious - Benzinga Breaking News | BP Slashes Workforce By 5% To Reach $2 Billion In Savings Goal
- Benzinga Breaking News | Trump's First Day Sends Gold Miners, Defense Stocks Soaring, Solar
Sliding - Benzinga Breaking News | Bitcoin, Ethereum, XRP Shed Billions In 9% Correction: 3 Factors
Driving The Downturn - Benzinga Breaking News | MongoDB's Solid Q4 Overshadowed By Weak FY26 Guidance,
Expects Non-Atlas Headwinds - Benzinga Breaking News | Nvidia GTC And Quantum Computing Drivers Of The Stock Market,
Trump Put Fails But May Not Be Dead - Benzinga Breaking News | Trump's SEC Pick Paul Atkins Says His 'Top Priority' Will Be 'Rational'
Crypto Regulations, Marking Shift From Gary Gensler's Approach
Al-Assisted Commentary Disclosure