SOFI - Heartland Mid Cap Value Fund Q1 2024 Portfolio Manager Commentary

2024-04-17 10:55:00 ET

Summary

• Heartland Advisors is a boutique, independent investment firm in Milwaukee, WI. Our value-focused, actively managed product suite includes distinct U.S. and international investing strategies, which are offered through five mutual funds and four separately managed accounts.
• Risk aversion seemed to dissipate further in the first quarter, as concerns about an economic slowdown that shook capital markets in 2022 and early 2023 shifted to a focus on upside economic catalysts including hope for an artificial intelligence (AI) driven productivity boom.
• Despite this excitement, cracks in the economy remain visible, as consumers have drained their savings and are taking on more debt.
• This mixed backdrop lends itself to a balanced approach, where discounted valuations and self-help catalysts can unlock value while economic noise blasts loudly.

First Quarter Market Discussion

The narrative in the market has gone from talk of a ‘hard landing’ (deep recession) to a ‘soft landing’ (mild recession) and now possibly ‘no landing’ (no recession) at all. Add to that investors’ hope the economy could get a boost from lower Federal Reserve policy rates, federal infrastructure spending, and/or productivity increases driven by AI technology, and it’s no surprise that risk aversion seemed to evaporate in the first quarter....

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