2025 Q2 Letter

Financial market volatility was a key theme throughout the second quarter of 2025. Between
April 2nd and April 8th, U.S. stocks, as measured by the S&P 500, dropped over 12%, extending
losses experienced at the end of the first quarter and resulting in a near 20% decline from
prior highs. This correction proved to be short-lived, however, as the S&P 500 subsequently
rallied to close out the quarter at new all-time highs (up 10.6% in the quarter and 5.5%
year-to-date). International stocks followed the same volatile pattern of U.S. stocks but have
significantly outperformed U.S. stocks during the most recent quarter and year-to-date. The
MSCI ACWI Ex USA (the key benchmark for global stocks outside the U.S.) was up 10.9% in the
quarter and is now up 16% year-to-date. A big reason for the relative strength of international
markets was weakness in the U.S. dollar (when the dollar weakens, other currencies and their
local assets rise in value). The U.S. Dollar Index (DXY) – a measure of the value of the U.S. dollar
relative to a basket of foreign currencies, is down nearly 11% year-to-date, explaining most of
the underperformance of U.S. stocks.