Change in leadership

In the current market turbulence, we are witnessing stark disparities in the scale of equity corrections. Since January 21, developed markets have underperformed emerging markets by 7%, growth stocks have lagged value by 11%, US large caps have trailed the rest of the world by 11%, and cyclicals have underperformed defensives by 18%. Within developed markets, the S&P 500 has underperformed the German DAX by 17.5% in local currencies since the beginning of the year. The dominant market leadership of MegaTech, which has defined recent years, is now being called into question.

At ECP, while we are not immune to the broader market downturn—as is the case for all long-only investors—our portfolios have remained relatively resilient. Our disciplined investment process prevents us from overpaying for any asset, even when the underlying company boasts strong fundamentals.