CAT - Rewey Asset Management Q1 2024 Investment Letter

2024-04-25 11:25:00 ET

Summary

• Rewey Asset Management is a boutique, value-oriented investment management firm dedicated to the needs of high net worth individuals and family offices with a fundamental driven research approach that focuses on long-term capital appreciation and downside risk management.
• Our RAM Smid composite gained 5.02% in 1Q24. Both our RAM Smid and the Russell 2500 Value index got off to a weak start in January, perhaps digesting the very strong 4Q23 returns, before powering ahead in March for the best month of the quarter.
• The reported economic data continued to be strong in 1Q24, with the final 4Q23 GDP report increasing 3.4%, up from a previous estimate of 3.2%.
• While we track market expectations for inflation and rate cuts, we do not build our investment cases based upon such short-term measures that are prone to fluctuate wildly.

The market indices continued their march higher in 1Q24, overcoming investor fears of a potential recession and fears the Fed might delay its expected interest rate cuts. The 1Q24 rally generally was led by larger cap stocks, with the S&P 500 index gaining 10.55% the Russell 2500 Value index (small/mid stocks) gaining 6.07% and the Russell 2000 Value index gaining 2.9%. The top-down nature of 1Q24's returns is seen in the performance of the S&P Equal weight index (SPW) which gained a more modest 7.91%, as the ten largest companies in the S&P 500 represent a cumulative 33.38% index weighting....

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