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Summary
- The major US indices continued to notch repeated record highs this quarter as solid economic data and strong earnings growth encouraged a bullish market sentiment.
- Concurrently, weakening labor data contributed to the September rate cut, while mixed FedSpeak leaves the pace of additional easing through year-end uncertain.
- The US Equity Income Fund underperformed its benchmark, the Russell 1000 Value Index, net of fees during t…
Summary
- The major US indices continued to notch repeated record highs this quarter as solid economic data and strong earnings growth encouraged a bullish market sentiment.
- Concurrently, weakening labor data contributed to the September rate cut, while mixed FedSpeak leaves the pace of additional easing through year-end uncertain.
- The US Equity Income Fund underperformed its benchmark, the Russell 1000 Value Index, net of fees during the third quarter.
- Enterprise software company, Oracle Corporation (1.5%), was a top contributor to relative returns during the quarter.
- Given the uncertain pacing of further interest rate reductions, softening labor market dynamics, and lofty stock valuations, we believe active management may become critical in identifying quality names.
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Market Overview
The S&P 500 Index increased by 8.12% (total return, in USD) in the third quarter of 2025, whereas the Russell 2000 Index increased by 12.40% (total return, in USD). The major US indices continued to notch repeated record highs this
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ORCL was a top contributor, driven by a surge in backlog and a robust AI-related revenue pipeline, supporting confidence in its accelerated growth trajectory.
DHI was added for attractive valuation and industry consolidation tailwinds; SSB was initiated due to management strength and anticipated loan revenue growth.
WFC was exited due to concerns over net interest income and commercial loan growth; ACN was sold amid AI disruption risks and pressured valuation multiples.