Q2 2020 Portfolio Commentary
In the second quarter, our strategy underperformed the S&P 500, our primary index, returning 15.87% vs. 20.54% for the index. Year to date, through June 30th, our strategy underperformed the index by 219 basis points, returning -5.27% vs. -3.08% for the index. Ultimately the second quarter was the best performing quarter for the S&P 500 index since 1998 and the best performing second quarter ever since the S&P 500 index was created in 1957. During this same timeframe, the Non-Payers of the S&P500 clearly outpaced the index and the Dividend Payers cohort as seen in Exhibit 1. The Non-Payers appreciated by 28.38% during the quarter whereas the Dividend Paying cohort appreciated by 18.03%. It’s especially important to note that the dividend paying cohort was broadly helped by recovering energy, retail, leisure, and apparel segments. While some of the companies within this cohort cut their dividends in recent months, they maintained a minimum dividend to remain a dividend payer.