We wish all of you a healthy and happy New Year and thank you for the trust and confidence you have placed in our relationship. Insight’s performance for our clients and their advisors in 2025 was exceptional and it reinforced our commitment to meeting our clients’ long-term portfolio objectives. These results build upon our outstanding long-term record for both generating strong but suitable investment results while delivering excellent service and administrative skills.
Our team is very proud of their efforts on your behalf, and I thank them for their meaningful work and dedication to our mission. Both Jennifer Garza and JoAnne Nishiyama have deep industry knowledge and contribute to our success in a myriad of ways; and Adrienne Brinton’s vast research and portfolio management experience has left a lasting imprint on our investment process and results. Although Adrienne has retired from her official responsibilities for serving clients, she will continue to be available to us for occasional strategic advice and consultation.
I would like to focus our discussion on investment results and how they are evaluated. Most important to us is meeting our clients’ long-term portfolio objectives. Simply put, this typically means providing for our clients’ lifestyle income needs and ultimate gifting aspirations, while preserving their portfolio’s value during adverse times. Our clients enjoyed a much better-than-expected result in 2025 as most stocks and bonds posted meaningful positive returns.
Though meeting each client’s absolute performance objective is most important, it is not the entire story. What can be even more important to some investors’ evaluation is how our returns compare to relevant benchmarks. Did we “outperform,” “underperform” or “perform in-line”, and why? This relative comparison helps us to understand how results were achieved (the sources of return), and is directed at the entire portfolio, as well as for each asset-class and each security in the portfolio. Furthermore, performance results are frequently compared to the actual results of peer investors with similar objectives investing in similar ways. These evaluations usually span multiple time periods such as comparing 1-year, 5-year and 10-year results.
Briefly, to evaluate each client’s relative performance objective, we can compare our portfolio-level results to a benchmark comprised of stocks, bonds and cash in similar proportions to each client’s investment policy targets. By example, we could measure the stock component with 60% in the S&P 500 Index, the bond component with 35% in the Bloomberg Aggregate Bond Index, and the cash component with 5% in the 90-day U.S. T-bill Index. Likewise, we can further our evaluation by comparing our results to a peer group of investors who manage portfolios with similar asset allocations and investment objectives such as “Balanced Growth and Income”.
Drilling deeper, we would like to evaluate the performance of each asset class to its relevant benchmark, such as comparing equity returns to the S&P 500 Index and bond returns to the Bloomberg Aggregate Bond Index. And then, we try to identify what factors determined why results were better or worse than expected. For instance, for stocks, how much portfolio exposure was there to economic sectors such as Healthcare, which may have outperformed the average, compared to Energy, which may have underperformed the average? Or was the performance differential due to greater portfolio exposure to other factors such as a company’s “Quality”, “Momentum” or “Size”?
Likewise, for bonds how much portfolio exposure was there to long-term bonds compared to short term bonds? Or was the performance differential due to greater portfolio exposure to other factors such as “Credit Rating”, “Sector” (Treasury, Agency, Corporate, Municipal), or “Coupon”? And finally,
we compare the operating results of each individual stock and bond with investor expectations as well as to companies with similar characteristics. For instance, did Pepsi’s operating results beat the consensus expectation, and how did they compare to those of Coca-Cola?
So, how did Insight portfolios fare in 2025 and over the longer 5- and 10-year horizons?
Portfolio Results: Generally, portfolio returns for 2025 were in the low- to high-teens depending on investment policy targets, slightly outperforming our comparable benchmarks. Our longer-term results for the 5- and 10-year periods were in line with benchmark results. Compared to peers with similarly invested Balanced portfolios, our results rank in the top third for all three time periods, as measured by Morningstar’s mutual fund database. These results can be attributed primarily to our asset allocation strategy of favoring stocks (due to our persistent belief in the strength of our economy) over bonds and cash (due to the threat of inflation and low real interest rate levels). Also noteworthy are lower investment fees and capital gains taxes realized under our management.
Asset-Class Results – Equity: Generally, our stock returns for 2025 were solidly ahead of the Dow Jones Industrial Average (+14.9%) and the S&P 500 Index (+17.9%). A significant reason for this was our sector exposure, which was high in Technology (+24.0%) and low in the Consumer sector (+5.0%).
Our focus on quality by investing in large, financially sound and profitable U.S. companies added to our outperformance. Other investors have also favored stocks with these characteristics, and this has continued to boost our long-term results. Compared to peers with similar Growth and Income investment styles, our equity results rank in the top 10% for all three time periods, as measured by Morningstar.
Asset-Class Results – Fixed Income: Generally, bond returns for 2025 were mid-single digits, as interest rates were somewhat stable from a year ago. Our returns were slightly below comparable benchmarks because our strategy was to favor short-term bonds and cash over long-term bonds, and high-quality bonds over low-quality bonds. Though this strategy limited 2025 returns, it materially added to long-term results. Compared to peers with similar Intermediate Municipal Bond portfolios, our fixed income results rank in the top third for all three time periods, as measured by Morningstar. Security Selection Results: Generally, the operating results of our major stock holdings were very strong and well received by investors. As such, our stock holdings were a significant source of outperformance. As for our bond holdings, we were pleased that there were no material surprises.
Though we now manage $250 million of client assets, we continue to seek out opportunities to grow our business. Please thoughtfully consider whether a friend or family member could benefit from our services. Your introduction is very much appreciated.
