Oakwood Capital Management

Many states have turned their “Open for Business”signs back on, indicating a march back towardnormalcy and a belief that the end of thepandemic is in sight. As restrictions are eased, states across the countryshould begin to experience an increase in bothsales and business tax revenue. The Biden Administration’s push for aninfrastructure bill should help to…

One year after the beginning of the Covid-19global pandemic, we see a new renaissance as thevaccine rollout in the U.S. continues to accelerate.As we slowly leave our state of hibernation, serviceindustries such as airlines, hotels, restaurants andretail stores, to name a few, will undoubtedlybenefit.Renewed consumer spending, in combinationwith accommodative fiscal policies, increase thepotential that the…

Since the pandemic lows of March 2020, theS&P 500 Index and the DJIA are both up 76%,while the Russell 2000 Index is up 126%. The current recovery in stocks has surpassed therecovery seen after the Great Financial Crisis, inlarge part due to the size and speed of both fiscaland monetary stimulus. Now that the recovery…

Stock markets around the globe had positiveperformance for a fourth consecutive quarter. The U.S. stock markets continued to perform thebest, as the pace of the vaccine rollout has beenbetter than expected. Interest rates generally increased in the U.S.Treasury market during the first quarter, yet ratesare still historically low. Global real estate had a good quarter,…

GameStop has gained notoriety lately given thelarge swings seen in its stock price or marketvalue, that was fueled by millennial online traders,even without a change in its intrinsic value. While some traders made money on GameStop,there were others who lost everything. Trading is not investing, and diversificationis important. Millennials will continue to influence the markets,fueled…

• Support for the budgetary needs of states is goingto be a higher priority for the new administration,as fiscal support is needed for both state andpandemic related shortfalls.• States that make the necessary fiscal changesshould be rewarded with higher credit ratings,which will ultimately lower their financing costs.• High tax states, such as California and New…

• Government support, with both fiscal andmonetary policy, has been and will continue to beimportant until the global pandemic ends.• The success of the distribution and administrationof newly developed vaccines will determine howquickly the global economy will be revitalized.• We were opportunistic in our portfolios in 2020,buying some corporate bonds early in the yearand avoiding…

• As we say good riddance to 2020, we greet 2021with hope and enthusiasm amidst the rolloutof vaccines which are expected to help end theglobal pandemic.• Many Wall Street analysts expect 2021 to be ayear when global economic growth and corporateprofits rebound, albeit with fits and starts.• An accommodative U.S. Federal Reserve (Fed)will continue to…

• Stock markets around the globe had positiveperformance for a third consecutive quarter, withdouble digit gains seen in the last quarter.• The U.S. stock market performed the best for theyear, followed closely by the emerging markets,while the international developed markets trailed,yet were still positive.• Interest rate changes were mixed in the U.S.during the quarter, however…

• Stocks tested us in 2020 – from steep declinesearly in the year as the pandemic took hold, toa stunning rally that has taken many indices intorecord territory.• Yet through it all, the good and the bad, anumber of important investment lessons werereinforced, providing us comfort in a year that wasso unusual.• Among the lessons…

• Stocks tested us in 2020 – from steep declinesearly in the year as the pandemic took hold, toa stunning rally that has taken many indices intorecord territory.• Yet through it all, the good and the bad, anumber of important investment lessons werereinforced, providing us comfort in a year that wasso unusual.• Among the lessons…

• Volatility took center stage in all segments of the capital markets during the second quarter, and the municipal bond market was no exception. • The creation of a Municipal Liquidity Facility helped to reassure investors that the Fed would backstop municipalities in the event of a liquidity crisis. • California and many other states…

• The U.S. Federal Reserve (Fed) sprang into action soon after the COVID-19 pandemic hit to protect investors from volatile bond and stock markets. • The Fed made use of $75 billion in credit facilities as a funding backstop for corporate debt issuers, increased purchases of treasury securities and lowered short-term interest rates to near zero. • As a result of better valuations, we were able to extend the average maturities of corporate bonds in client portfolios. • At this time, we are not purchasing any additional longer-dated Treasury securities in our portfolios.

Many investors have been confused by the recent rebound in the stock market, while the real economy was still essentially closed. • Economic data has shown improvement from the depths of the complete shutdown of the economy, which lasted from mid-March through April. • We continue to monitor the data carefully and make adjustments to client portfolios along the way, keeping a close eye on employment levels and corporate earnings. • We are looking to position portfolios to capture longer-term trends that are likely to endure long after the pandemic has passed.

• Stock markets around the globe bounced back during the second quarter, even though global economies are dealing with pandemic-induced recessions. • The U.S. stock market outperformed stocks in the international developed markets and the emerging markets during the quarter. • Interest rate changes were mixed in the U.S. Treasury fixed income market in the second quarter, as the yield on shorter-term notes decreased slightly, while the yield on longer-term bonds increased slightly. • U.S. REITs and Global REITs also bounced back, yet underperformed U.S. and global stocks during the quarter.

We have seen a divergence between the stock market and economic reports over the recent quarter as stocks have rallied from the March lows. • Markets, by their very nature, are forward-looking, which means that current asset prices reflect the combined expectations of market participants. • The quick and decisive actions taken by fiscal and monetary authorities after the start of the pandemic have helped to fortify and sustain the market’s optimism. • We believe the stock market has effectively become the best available leading macroeconomic indicator

We have seen a divergence between the stock market and economic reports over the recent quarter as stocks have rallied from the March lows. • Markets, by their very nature, are forward-looking, which means that current asset prices reflect the combined expectations of market participants. • The quick and decisive actions taken by fiscal and monetary authorities after the start of the pandemic have helped to fortify and sustain the market’s optimism. • We believe the stock market has effectively become the best available leading macroeconomic indicator

Executive Summary 1Q2020