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Recap: 1Q23 Semi-Annual Portfolio Manager Conference Call

In case you missed it…

On May 4th, Ariel’s portfolio management leadership team presented insights on the past quarter and what’s next during its semi-annual market update call.

The webinar, moderated by Co-CEO & President Mellody Hobson, began with a lightning round with predictions for the remainder of the year. As our clients already know, Ariel is built on a devil’s advocate network. We embrace and encourage disagreement among our portfolio managers. Differing opinions make us better as a firm. We believe that diverse perspectives lead to better outcomes.

Founder, Chairman, Co-CEO & Chief Investment Officer John W. Rogers, Jr., Global Equities Chief Investment Officer Rupal Bhansali and Chief Investment Officer, Emerging Markets Value Henry Mallari D’Auria made various bets on the most pertinent topics today:

  • U.S. stock market –higher or lower by year-end?
    • John: higher
    • Rupal: lower
    • Henry: lower
  • Inflation – hot, cooling or just right by year-end?
    • John: just right
    • Rupal: cool
    • Henry: still hot
  • Interest rates – has the Fed finished tightening or is there more to go / or will they move higher or lower by year-end?
    • John: lower
    • Rupal: same
    • Henry: higher
  • Recession – are we likely or not likely to see one over the next 12 months?
    • John: no
    • Rupal: yes
    • Henry: yes
  • Large-cap S&P 500 or small-cap Russell 2000 – which will outperform over the next three years?
    • John: Russell 2000
    • Rupal: S&P 500
    • Henry: Russell 2000
  • MSCI Index or MSCI Emerging Markets Index – which will outperform over the next three years?
    • John: EM
    • Rupal: EM
    • Henry: EM
  • Have you used Chat GPT?
    • John: no
    • Rupal: yes
    • Henry: yes

John, Rupal and Henry were then joined by Vice Chairman & Head of Investment Group Charlie Bobrinskoy, Executive Vice President & Director of Research Tim Fidler and Executive Vice President & Portfolio Manager Ken Kuhrt for a wide-ranging discussion on the following topics:

  • Volatility in the markets due to the instability of the Financial sector 
  • Inflation 
  • A deeper dive on thoughts about a potential recession 
  • China 
  • A closer look at sectors: Real Estate, Commodities and Consumer Discretionary 
  • What’s next and where we are headed 

As always, we thank you for your relationship with Ariel. Please do not hesitate to contact [email protected] if you would like to continue the conversation.

The Portfolio Manager Conference Call you are about to view is available to the investing public but was geared toward use by institutional investors or individual investors with their financial advisors. The replay highlights information about the separately managed account strategies offered by Ariel Investments, LLC. These strategies are available to institutional clients, including public and private retirement plans, union plans, foundations and endowment funds, and high net worth individuals. Advisory services provided and the fees charged will vary depending upon the nature of the account under management. The performance of the Ariel Investments mutual funds will differ from the performance of the strategies discussed in this replay. Investors should consult their financial advisors before making any investment decisions. Past performance does not guarantee future results.

The information in this presentation does not provide information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell any particular security. The opinions and forecasts were current as of the date of this presentation but are subject to change. Any specific securities identified and discussed in this presentation do not represent all of the securities purchased or sold for the firm’s clients. This material should not be considered an offer for any of the securities referenced.

Portfolio holdings are subject to change. The securities discussed do not represent an entire portfolio and in the aggregate may represent only a small percentage of portfolio holdings of a composite. The performance of any single portfolio holding or sector is no indication of the performance of other portfolio holdings or sectors of a composite. See current holdings information for Ariel’s portfolios on this web site by navigating to a specific product and then clicking on the “Holdings” tab.

Investing in small- and mid-cap stocks is more risky and volatile than investing in large-cap stocks. The intrinsic value of the stocks in which the mutual funds (the Funds) invest may never be recognized by the broader market. The Funds are often concentrated in fewer sectors that their benchmarks, and their performance may suffer if these sectors underperform the overall stock market. Investments in foreign securities may underperform and may be more volatile than comparable U.S. stocks because of the risks involving foreign economies and markets, foreign political systems, foreign regulatory standards, foreign currencies and taxes. Investments in emerging markets present additional risks, such as difficulties in selling on a timely basis and at an acceptable price. The use of currency derivatives and exchange-traded funds (ETFs) may increase investment losses and expenses and create more volatility. Investing in equity stocks is risky and subject to the volatility of the markets. A concentrated or focused portfolio may be subject to greater volatility than a more diversified portfolio. Investments in emerging markets present additional risks, such as difficulties in selling on a timely basis and at an acceptable price.

This document may contain forward‐looking statements relating to the objectives, opportunities, and the future performance of the markets generally. Forward looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward‐looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward‐looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward‐looking statements.  Prospective investors are cautioned not to place undue reliance on any forward looking statements or examples. None of Ariel Investments or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward‐looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.