Bahl & Gaynor

Big Reasons to Think Small: Diversification The S&P 500 Index remains concentrated with the Magnificent 7 cohort of companies representing a record 34.6% of the index capitalization at the end of 2024. Significant differences exist between the sector composition of large cap indexes and smid cap indexes. Investors may find equity diversification a difficult priority to address when only considering style exposures in the large cap space. Smid equity exposure can potentially address concentration concerns by offering different and complementary sector exposure to that of large cap indexes. Continue reading here: https://bit.ly/4bj8snj

Big Reasons to Think Small: Valuation Large cap and growth style categories currently possess the highest valuation levels, as measured by next 12- month (NTM) P/E ratio, relative to the 20-year average (pictured below). Conversely, the small and mid-cap range of both the blend and value style categories are much closer to their 20-year average valuation levels. Investors seeking unassuming valuations may find allocation opportunities in the smid cap range of portfolios exhibiting both blend and value style categories. Continue reading here: https://bit.ly/4kjIZOw

All for Cincy and 35 years of dividend growth investing! We are back and excited to kick off the 2025 FC Cincinnati season as a proud partner. Be sure to visit the Bahl & Gaynor Pitch View Club this season! #DividendsPayDividends #FCC #FCCincinnati #BG35 #35Years FC Cincinnati

Bahl & Gaynor has been operating strategies in the small and mid (smid) capitalization equity space via our fundamental dividend growth philosophy for over a decade. In our latest article, we highlight what we view as three compelling characteristics of smid equity exposure today: valuation, diversification, and potential earnings inflection. Continue reading here: https://bit.ly/4i0TR26

Large cap returns have outpaced smid and small cap cohorts over the past five to seven years, but this dynamic tends to be cyclical and mean-reverting. Market data dating back to 1927 confirms that small cap stocks have delivered higher returns than the broader large cap market. Meanwhile, smid dividend stocks have performed competitively and constrained beta (or volatility) levels similar to total equity market exposure. Bahl & Gaynor’s investment philosophy has been applied to both the smid and small market cap spectrums to capture this compelling return and risk profile. View our Investor Letter for full market commentary to learn more:? https://bit.ly/414x7s4 #BG35 #35Years #DividendsPayDividends

There are years that happen in weeks, and other times when weeks happen in years. News developments around tariffs in just the first day of this week are a reminder that portfolio management should involve a measured approach to anticipated policy changes, and even enacted policy. A pause in tariffs levied on Canada and Mexico, and a mild and delayed retaliation from China, suggest an increased probability of a negotiated trade policy outcome, though time will tell. We are reminded of the S&P 500 Energy sector performance during the first Trump Administration and the Biden Administration as shown below. Despite very different regulatory agendas pertinent to this sector, the energy sector was the only negative-returning sector during a benign Trump Administration policy environment, yet the sector delivered significant gains in a more adverse Biden Administration policy environment. Bottom Line: The steady state of trade policy outcomes, and their impact on company fundamentals, is likely far from determined. It is interesting to us at Bahl & Gaynor that investors appeared much more reactive to unexpected developments around DeepSeek than well-covered trade policy news. Arriving at an ultimate trade policy resolution will likely involve further volatility.?Fortunately, this is a condition our fundamental dividend growth philosophy is designed to address via our exposure to quality business models with flexibility in a variety of economic environments.?Volatility is also a channel through which great businesses can become mispriced, and it is our opportunity as active managers to capitalize upon this when it occurs. Continue reading here:?https://ow.ly/2iCq50UTyLe Published on 2/4/2025. The information provided herein is for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities. The views expressed reflect the opinions of Bahl & Gaynor as of the date of this communication and are subject to change. Bahl & Gaynor assumes no liability for the interpretation or use of this report.

Over the weekend, the market received its first glimpse of actual trade policy implementation. Bahl & Gaynor highlights known facts, including the relatively closed nature of the U.S. economy: 14% of U.S. GDP is currently derived from imports according to the St. Louis Fed. We discuss how our fundamental investment process can identify resilient businesses and recognize opportunities amid market volatility driven by major news events. Continue reading here: https://ow.ly/Xqjn50USO3p

DeepSeek Implications: Additional Insights from Bahl & Gaynor As the market processes recent DeepSeek developments and earnings from several “Magnificent 7” companies, Bahl & Gaynor builds on our initial?thoughts?with further insights into the evolving? artificial intelligence (AI) landscape and how investors may shift their approach to AI investment. ? Continue reading here: https://ow.ly/UKaK50URoBU

Recent large cap returns have been driven overwhelmingly by price appreciation rather than dividend return—deviating from the century-long average. A reason for this recent shift could be significant business investment opportunities like cloud computing or artificial intelligence that enhance future ability to pay dividends. While price appreciation has dominated over the past 15 years, dividends could be poised to play a greater role in the next 15 years. Bahl & Gaynor’s investment philosophy leverages both return sources. View our Investor Letter for full market commentary to learn more: https://lnkd.in/gh9R2tHq

Understanding DeepSeek: Bahl & Gaynor’s Perspective DeepSeek has recently captured investor attention and exerted significant price action on public AI infrastructure companies. Bahl & Gaynor reviews what is known, what is yet to be understood, and attempts to outline a framework for evaluating the longer-term effects of disruptive innovation on AI technology development. Continue reading here: https://lnkd.in/gmYZdP2C