Insights
In this episode of KayneCast, host Jordan Greenhouse is joined by Julie Kutasov, Portfolio Manager of the KAR Small-Mid Cap Core Strategy. Together, they discuss the stock market review for Small Mid Cap Core during Q1 and examine the impact of recent geopolitical events on the stock market outlook for 2022.
Ukraine-Russian War Impacts Stock Market Outlook for 2022
The first quarter of the year began with concerns about inflation and expected increases in interest rates that could negatively impact the Small and Mid-Cap segments of the stock market during2022. In addition to inflation concerns and interest rate increases, the unprecedented sanctions the international community leveled against Russia after the invasion of Ukraine on February 24thhave also had a substantial impact on global markets. The importance of the two nations to the energy and agricultural sectors saw a spike in energy prices and fears of a rise in global food prices. Fallout from the Ukraine war, pre-existing inflationary pressures, post-pandemic supply chain disruptions, and labor shortages are, as Kutasov points out, “now expected to be more meaningful and last longer than initially anticipated, potentially forcing the Fed to increase rates more aggressively.”
Small Mid Cap Commentary and Outlook for 2022
Kutasov points out investment strategies with minimal direct exposure to Russia and Ukraine should see little direct impact. However, secondary effects such as rising fuel costs may put pressure on consumer spending and increase the risk of stagflation. She notes crises often bring opportunities, and that KAR’s approach to new idea generation is looking for companies in segments under pressure and searching for those companies that have built-in protections from those issues.
Small Mid Cap Core Contributors and Detractors
Listen to the podcast above to learn more about the top contributors and detractors in KAR’s Small Mid Cap Core Quality strategy for Q1 2022.
Learn more about our Small Mid Cap Core Portfolio today.
This information is being provided by Kayne Anderson Rudnick Investment Management, LLC (“KAR”) for illustrative purposes only. Information contained in this material is not intended by KAR to be interpreted as investment advice, a recommendation or solicitation to purchase securities, or a recommendation of a particular course of action and has not been updated since the date of the material, and KAR does not undertake to update the information presented should it change. This information is based on KAR’s opinions at the time of the recording of this material and are subject to change based on market activity. There is no guarantee that any forecasts made will come to pass. KAR makes no warranty as to the accuracy or reliability of the information contained herein.
