Hostilities in Iran have resumed since we last wrote this letter. We expected policymakers to pursue lower energy costs and stable financial conditions, particularly in an election year. But renewed hostilities, attacks on energy infrastructure, and disruptions to shipping routes sent oil back above $100 per barrel in September. High fuel prices continue to benefit oil producers and other companies in the Energy sector. We benefited by owning several high-quality companies exposed to these dynamics, but those benefits have been offset by the war’s downstream impacts. Consumer purchasing power has declined, transportation and manufacturing costs have increased, and cost control is back on corporate agendas.
The second quarter began with investors grappling with the implications of the Iran War. Headlines around the conflict, the status of the Strait of Hormuz, and the prospect of ceasefires drove swings in oil prices, Treasury yields, and investor sentiment. On days when geopolitical risk intensified and oil prices rose, interest rates often moved higher as investors worried about the impact of higher oil prices on inflation and consumer spending. On days when headlines improved, oil prices fell, Treasury yields declined, and markets became more constructive. The interplay among energy prices, inflation expectations, and monetary policy was one of the major themes in markets this quarter.
Hamlin’s Equity Composite advanced 0.41% over the first three months of 2026, compared to a 4.33% decline for the S&P 500. Stock markets wobbled as AI-driven disruption headwinds, private credit concerns, and the war in Iran erased early-quarter optimism around post-tariff normalization and a potential interest rate easing cycle. The Hamlin Bond Composite increased 0.89% during the quarter, outperforming the Bloomberg High Yield Muni Index’s 0.71% gain.*
*Hamlin equity performance reflects the performance of the Hamlin Equity Only Composite. Hamlin bond performance reflects the performance of the Hamlin Bond Only Composite. Individual accounts vary. Q1 2026 performance is a preliminary estimate as it has not yet been examined by ACA Performance Services and may be subject to change.
Hamlin’s equity composite advanced 0.52% over the last three months of 2025, compared to a 2.66% gain for the S&P 500. Market sentiment became increasingly constructive as the Federal Reserve’s easing cycle helped outweigh concerns surrounding the longest U.S. government shutdown on record and a brief bout of anxiety around a potential AI bubble, fostering a broader risk-on environment. The Hamlin bond composite increased 1.90% during the quarter, outperforming the Bloomberg High Yield Muni Index’s 1.15% gain.*
*Hamlin equity performance reflects the performance of the Hamlin Equity Only Composite. Hamlin bond performance reflects the performance of the Hamlin Bond Only Composite. Individual accounts vary. Q4 2025 performance is a preliminary estimate as it has not yet been examined by ACA Performance Services and may be subject to change.