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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

July 11, 2022

The S&P 500 Index posted its worst first-half loss since 1970 and worst six-month loss since 2009, down -20.0 percent year to date, through June 30. Despite the +7.3 percent rise in forecasted next-twelve-month earnings, the S&P 500’s forward price-to-earnings (PE) multiple contracted with the climb in the 10-year Treasury yield and is now back to its 20-year mean of 15.7 times. The large year-to-date shift in bond yields hit long-duration and other rate-sensitive equities especially hard.

We believe stocks largely discount a mild downturn or stagflation scenario but expect markets to stay volatile. Catalysts for stock upside include earnings cuts that are less severe than feared, easing inflation/a less hawkish Fed, and signs China’s stimulus is backstopping global growth. Downside risks include persistent inflation, a policy error, Covid-19 flareups, or a geopolitical crisis. Nevertheless, equity market dislocations are providing attractive opportunities for stock picking.

We believe diversification and an emphasis on quality stocks are appropriate within portfolios, as market volatility will likely persist against a backdrop of tightening Fed policy, decelerating corporate earnings growth, and continued geopolitical tensions. Quality, as we define it, refers to companies with visible earnings growth, strong balance sheets, free cash flow generation, and proven management teams. Notably, the broad-based correction in equity markets during the first half of 2022, driven entirely by multiple compression, has presented opportunities to dynamically upgrade holdings to improve each portfolio’s overall risk-return profile.

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

Sit Mutual Funds was the
Barron’s #1 fund family of 2021

In its 2022 annual Best Fund Families article, Barron’s named Sit Mutual Funds as the top fund family. Barron’s measured manager skill across five fund categories. The complete list of ranked fund families is available online.

2022 Investment Seminars

Sit Mutual Funds will be offering three different investment seminars this summer.  For content and date information please visit the 2022 Seminar page.

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