2nd Quarter Review

The U.S. equity market performance showed little change by the end of the second quarter as the higher levels of market volatility experienced early in the year continued. Conversation among investors continued to focus on the debate regarding interest rates, as the first rate hike since 2008 is expected to occur later this year. Many analysts believe this is an important step in restoring the U.S. economy to function properly with higher interest rates, more similar to historical levels.

Alternatively, there are many who believe that the U.S. economic recovery is still fragile and is susceptible to negative effects from the deteriorating economic crisis in Greece and the sharp decline in China’s stock market.  Moreover, some believe that price declines in commodities could result in possible deflation down the road. Amidst investor concerns, the consensus seems to be that the Fed will raise rates in September and the market prices may have begun to reflect this.

Equities performance for the second quarter was mixed as the broader market ended the quarter almost flat. The S&P 500 Index declined by .2% and the S&P 500 Total Return Index (with reinvestment of dividends included) increased by .28%. Closed-end fund performance was notably weaker as the CEF Index declined 3.66% for the quarter. Doliver’s core portfolio outperformed the CEF Index, while having significantly lower standard deviation (i.e. risk) than the broader equities market.

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