December 2021

Over the past week, we have received several calls regarding what appears to be large drawdowns in certain ETFs in our portfolios. In both instances, the drawdowns resulted from large dividend or cap gain distributions, not actual losses. It is common for a fund or ETF to trade “ex” the dividend a few days before seeing the dividend post to accounts. At first glance, it can take you by surprise, with the immediate reaction being poor market performance as the likely cause.

News of a new COVID variant, dubbed Omicron, and hawkish language from Fed Chair Jerome Powell led to a volatile month for both equity and fixed income investors. Equity markets ended the month lower by -0.69%, despite starting November on strong footing. This decline began on Black Friday and coincided with the announcement of the newly discovered Omicron variant.

The global reopening and supportive supply/demand dynamics have boosted commodities performance to some of its strongest levels in more than 20 years, +32% YTD (as of 11/30/21).  While this has clearly benefitted investors’ portfolios, it has also created a unique tax situation.