Unlike last year which was one of the worst starts for the market in recent memory, 2017 has started out on a strong note.  The Broadleaf Growth Equity portfolio gained nice ground on the indices during the first quarter of the year, up 10% net of fees.  Since inception and over the past ten years and three years, the portfolio’s results have matched or exceeded those of the S&P 500 on a net of fees basis, while intermediate results over the past five have lagged.

The popular indexes have been the “five star” managers in recent years, largely due to what we believe is almost always a nearly universal catalyst — “fund flows gone wild.”  Money has flocked to these vehicles due to their simplicity and low cost, exacerbated further by the on again and off again exposures available to traders through the proliferation of increasingly exotic exchange traded funds.

In the rush to index investing, many have seemingly given up on capitalism.  Investors are actively choosing to be average rather than fighting for something more, something both excellent and praiseworthy.  To be sure, the performance of the popular averages have been a hard hand to beat over the past five years, but we shall see, as we always do, how they fare going forward.

The future does not always look like the recent past, indeed.

For further information on the quarter and our investment outlook, please view a printable version of this Review: First Quarter 2017 Commentary and Review