Webinars [[{“value”:”Original broadcast details
Date: Tuesday, April 15, 2025
Executive Summary
The S&P 500 lost 4.3% in 1Q25, its worst quarter since 2022.The Magnificent Seven declined by over 15% on average, dragging down the S&P 500, reversing the trend of the prior two years. The rest of the S&P 500 on average performed much better, and the S&P 500 Equal Weight index declined only 0.6%.
Lyrical CS outperformed the S&P 500 by 360 bps.The main driver of the outperformance was that our value portfolio did not own Magnificent Seven mega-cap growth stocks.
International stock performance was the big story of the first quarter.While the S&P 500 lost 4.3%, the MSCI EAFE index gained 6.9%, an 11 percentage point difference. Our International Value composite performed even better with a 9.0% return. Even after this quarter’s performance, we believe the opportunity in International stocks remains extreme, and even more so in International value stocks.
The tariffs announced on April 2nd have roiled the equity markets, overshadowing whatever happened in the first quarter.We believe Lyrical’s focus on quality and analyzability has positioned us well to manage through this current unpredictable environment. Our portfolio should also be well positioned to handle any economic stress that arises from tariff fallout.
Additionally, our portfolio carries a steeply discounted valuation, and a superior growth history.Lyrical CS composite P/E is attractive at 11.7x. Meanwhile, the S&P 500’s P/E is 20.1x, 25% above its average since our inception, and 72% above that of Lyrical-CS. Furthermore, Lyrical-CS’s current portfolio EPS growth history is more than two percentage points faster than the S&P 500’s.
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