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2021 Mid-Year Capital Market Expectations


The Anfield Investment Committee took on a mid-year review of our capital market expectations (CME’s) from earlier in 2021. As we have mentioned in the past, we construct portfolios built for a variety of time horizons—our fixed income portfolios are generally designed with a 1-3 year time horizon, our balanced portfolios are constructed with a 3-5+ year time horizon in mind, and our most aggressive portfolios are typically constructed with a 7+ year time horizon.


Similar to our original analysis earlier in the year, due to the extremely uncertain environment we find ourselves in currently, the team has decided to keep our forecasts short in duration vs. the forecasts given in prior years, which were for a 3-5 year annualized returns for equity sectors (e.g. US Large Cap, Emerging Markets, etc.), while continuing to provide one year forecasts for various fixed income and alternative markets (e.g. real estate).


Amongst the major asset classes, equities (broadly speaking) have been stronger than we originally forecasted. US Large and Small Cap stocks have both returned more than 10% midway through the year (which for any full year could be considered a success!) On the international front, Emerging Markets have struggled to keep pace with their International-Developed Market brethren, as news out of China continues to roil the markets and have major influence on returns abroad. On the fixed income front, we noted in our last forecast that markets in this realm looked to be strained in 2021, and that has exactly been the case. The broad bond market (as measured by the Bloomberg Barclays US Aggregate Index) has been flat/negative on the year, while domestic interest rates continue to be more volatile than we have expected. We continue to believe that US High Yield will end 2021 as the top performing fixed income sector, where the potential returns are in the mid-single digits, while Treasuries could still have a negative year despite the April through July rally we experienced.





In summary, the Anfield team still maintains that 2021 will wind up being a strong year for the equity markets and a difficult year for fixed income markets—with the US Agg down 0.87% YTD through July 15, it is quite possible the index does not end the year in the green. With the resurgence of Covid-19 in various parts of the country, the potential for completion of infrastructure bills (hard and soft) and approval this Fall, and the volatility in the fixed income markets, we look for the remainder of 2021 to be driven by headlines and remain volatile.


Anfield Capital Management, LLC is a registered investment adviser with the SEC. This report is for informational purposes only and does not constitute advice, an offer to sell, or a solicitation of an offer to buy any securities and may not be relied upon in connection with any offer or sale of securities. The contents of this report should not be relied upon in making investment decisions. The information and statistical data contained herein have been obtained from sources that we believe to be reliable but in no way are warranted by us as to accuracy or completeness. The accompanying performance statistics are based upon historical performance and are not indicative of future performance. The types of investments discussed do not represent all the securities purchased, sold, or recommended for clients. You should not assume that investments in the securities or models identified and discussed were or will be profitable. Results of the models do not reflect the performance result of any one client. Not all clients have experienced this specific return level. Actual client returns may differ materially from the performance of the models due to actual fees incurred by clients, timing of cash flows, or client restrictions (e.g., restrictions on specific securities, industries, or types of securities). Clients who invested in the models after our initial trade date for any security may have experienced materially different performance and may have lost money.


While many of the thoughts expressed in this report are stated in a factual manner, the discussion reflects only Anfield Capital’s beliefs about the financial markets in which it invests portfolio assets following the models. The descriptions herein, are in summary form, are incomplete and do not include all the information necessary to evaluate an investment in any model. The models described represent current intentions. However, Anfield Capital may pursue any objectives, employ any techniques, or purchase any type of financial investment that it considers appropriate for the models and in the best interests of its clients.


Any prior investment results or returns are presented for illustrative purposes only and are not indicative of future returns. An investment in the models presented herein involves a high degree of risk and could result in the loss of your entire investment. Investments with Anfield are subject to significant risks, which include, but are not limited to, the risk of loss of principal, lack of diversification, volatility, and market disruptions. Prospective investors are referred to our Form ADV 2A for a more detailed discussion of risk factors, which can be (a) found on the SEC's Investment Adviser Public Disclosure website at: http://adviserinfo.sec.gov, or (b) provided upon request. You should not construe the contents of this report as legal, tax, investment, or other advice. No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained herein by Anfield Capital, its employees and no liability is accepted by such persons for the accuracy of completeness of any such information or opinions. Registration as an investment adviser does not imply a certain level of skill or training and no inference to the contrary should be made.

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