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Direct your investments

Sit ESG Growth Fund

to where standards matter.

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Direct your investments

Sit ESG Growth Fund

to where standards matter.

.

Direct your investments

Sit ESG Growth Fund

to where standards matter.

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Market Commentary
September 9, 2020

The S&P 500 Index recorded its best August gain since 1986, as rising investor confidence that a Covid-19 vaccine is imminent and massive global stimulus propelled equities higher.  The rebound in stocks also reflects an improving outlook for the economy and corporate earnings vis-à-vis the market bottom in March. The Citi Economic Surprise Index surged to a record high in August, with a broad swath of economic metrics better than expected – or more precisely, better than economists previously feared.  However, historic excess liquidity, a fear of missing out, and a lack of investments other than equities that offer adequate return potential pushed the S&P 500 to overbought levels. FAANG + M technology stocks (i.e., Facebook, Amazon, Apple, Netflix, Google, and Microsoft) continued to lead large capitalization indices higher, and market gains broadened modestly in August.

We remain constructive on domestic equities over the intermediate and long term, yet are mindful of the multitude of risks and uncertainties that will keep stocks volatile and vulnerable to pullbacks near term. Equity market gains have been exceptionally concentrated year to date, with the performance of large cap indices dependent on a small number of technology-oriented companies. The FAANG + M stocks contributed 119 percent and 64 percent to the return of the S&P 500 Index and Russell 1000 Growth Index, respectively. At the end of August, these stocks remained extended, trading roughly 40 percent above the basket’s 200-day moving average. Given their hefty weighting in the two indices, a pullback in the FAANG + M stocks would weigh considerably on the performance of these measures.  Despite our favorable longer-term outlook for the sector, we recently took profits in some technology highfliers and added to positions within healthcare.

For our latest full Global Investment Outlook & Strategy Update, download the .pdf document.

Sit Mutual Funds will continue to operate at the highest level during this outbreak, and we invite you to contact us with questions or concerns. You can reach us at 800-332-5580 or email us at info@sitinvest.com.  We will continue to post updates about market and economic developments on our website at www.sitfunds.com.

Sit Investment Associates – Current Operations

During this disruption, we have three primary goals: 1) Do what we can to protect the health and well-being of our colleagues and their families, 2) Continue to research and actively manage investment portfolios pursuant to our client’s objectives, and 3) Serve our clients by staying focused on their long-term goals.

Operationally, we have implemented our work from home procedures to accommodate the need of certain colleagues to be at home and to do our part to support the virus mitigation efforts.  Our associates are returning to work in accordance with government health and safety guidelines.  We are fully operational – effectively making investment decisions, executing and settling trades, maintaining client account records, and communicating with clients.

Conditions are changing quickly, and it is possible that our receipt of mail through the United States Postal Service could at times be delayed.  We recommend that shareholders conduct transactions online at www.sitfunds.com and select the Account Access option under the Account Management drop-down menu at the top of the page.

Please call us if you have any questions.

Thank you for investing with Sit Investment Associates.

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