Two events dominated headlines last month: the debt deadlock saga in Washington and the AI frenzy. Here’s a bottom-up report of all that happened in May 2023. This report covers the highlights of all the asset classes in Rise’s portfolio in the month of May so that you get a holistic view of everything that has been happening, how it affects you, and our outlook for June.

Stocks —- 6.54%
Real Estate —- 1.16%

Fixed Income —- 0.83%


In May, the lingering banking crisis from April seemed to be behind us, with concerns over the US Treasury running out of cash causing unease for investors. The S&P 500’s marginal 0.25% gain last month is seen as a win, given that a potential default by the US Treasury could be catastrophic, to say the least, for the stock markets.  Despite the nervousness in the market, Rise Equity’s portfolio had a strong performance in May 2023, with a gain of 6.54%, outperforming the benchmark index. Our exposure to companies that are well-positioned in the AI craze boosted our impressive portfolio performance, coupled with the defensive nature of our portfolio companies. 

With the signing of the debt ceiling suspension bill by President Joe Biden, the US Treasury Department will resume new debt issuance. Potentially exceeding $1 trillion in fresh securities, the replenishment process carries the risk of raising short-term funding rates and further squeezing the economy. In the upcoming months, we continue to anticipate a rough road ahead.  We anticipate that the combination of tight monetary policy and declining credit availability will have a negative impact on the economy in the coming months.

Despite these worries, we maintain an upbeat outlook regarding the potential of our investment portfolio. Investors should look past this short-term volatility and invest in fundamentally strong investment asset classes – like ours.  We are monitoring the current market trends and our asset allocation strategy and investment approach continue to serve us well in this turbulent market environment. We will continue to stay disciplined in our investment strategy and remain committed to delivering strong results for our investors.

Real Estate 

Our real estate portfolio continues to deliver inflation-hedged returns in May 2023. Our real estate portfolio generated 1.16% in rental income this past month, well above the 0.4% US month-over-month inflation in April 2022.

In May, the median selling price fell 1.7% from a year ago – the most in 11 years-, restrained by limited inventory and high mortgage rates. The elevated borrowing costs, paired with limited listings, are restraining sales. With mortgage rates about twice as high as they were at the end of 2021, many sellers are still reluctant to list their houses, and some buyers are sidelined.

The possibility of a recession in the United States economy is looming, and the real estate asset portfolio that we have provides the steadiness that investors require during these turbulent and volatile times. We expect home prices to continue to drop through the end of the quarter, which is good for our earnings since rental demand and prices continue to be strong. 

Don’t forget that with Rise, you can own real estate through our portfolio or purchase directly in your name if you prefer.

Fixed income

On the fixed income side, in May 2023, rates  rose on a combination of concerns among investors. First, there was uncertainty over what the Federal Reserve would do with interest rates given a still strong economy – The US economy added 339,000 jobs last month, soaring past expectations. Second, the battle over raising the debt ceiling and the possibility of a U.S. default throughout the past month

The last week of May saw an increase in yields across the board for U.S. Treasury securities of all maturities. Yields on 10-year bonds finished the day at 3.68%, which is a gain of 21 basis points (bps), while yields on 2-year bonds increased by 28 bps. Given the uncertainties surrounding US Treasury defaults and the fact that the market is offering a better yield, our Rise Fixed Income portfolio returned a stable 0.83% in the month of May.

Going forward, markets are already pricing in a 17% chance of a hike in rates next month (June 2023), which we expect should make for a more stable environment for fixed income through the second half of 2023. Our outlook for fixed income still remains positive, as we expect the market to continue to strengthen amidst fresh Treasury borrowing.

That’s May’s wrap. We are excited about all that June has in store for us. As your asset manager, we will continue to look for ways to serve you better and make your journey to financial success as smooth as possible.