The first quarter of 2021 led to strong absolute results for the Ewing Morris fixed income and equity investment strategies. The results for markets, however, were mixed. Most stock indices advanced, while the main fixed income benchmarks struggled under the weight of higher interest rates.
Investors love a good story, and thus far, 2021 is serving it up in spades. From Bill Hwang and Gamestop, to the SPACs craze in the U.S., most of the stories that made headlines reinforced how wrong some of the most successful investors can appear in the short-term. At Ewing Morris, we refer to most short-term narratives as noise that rarely induces action. That said, stories like these are important to follow in the event opportunities or risks arise when short-term prices disconnect from long-term fundamentals. A few of the headlines indicate the appetite for investors in momentum assets may be slowing, and that investors who are blindly following the successful trades of prior years, may be in for a bumpy ride. Read more in our Quarterly Letter sent to clients.