Founded in 1981, Sit Investment Associates is a privately held, multi-billion-dollar asset management firm that provides focused investment management expertise, competitive long-term results, and unparalleled service to our clients.
Sit Investment Associates is one of the largest independent, minority-owned investment firms in the U.S. For over 40 years our success has been built on long-term client relationships, which in turn are built on a foundation of trust, commitment, understanding, and expertise. We take pride in serving as a true extension of our clients’ operations. Our highly experienced and knowledgeable investment professionals work directly with clients providing highly individualized service in an increasingly challenging economic and financial environment.
We employ a disciplined, fundamental, research-driven investment process guided by highly experienced and knowledgeable senior investment professionals who interact directly with our clients. As a result, our clients can count on the firm to achieve highly competitive results, coupled with exceptional client service.
We view investing as the practice of applying a consistent philosophy and collaborative decision-making process driven by disciplined, fundamental research. Our broad top-down analysis in tandem with extensive bottom-up analysis enables us to identify, assess and understand the securities in which we invest.
The backward-looking “hard data” point to an economy still growing at a solid pace. However, recession odds have surged over the past month as the so-called “soft data,” or forward-looking opinion surveys, have weakened materially on record-high policy uncertainty. Businesses are delaying capital spending until policy clarity improves, and consumers expect inflation and job losses to spike. Although “soft data” can provide false signals, the economic outlook remains squarely skewed to the downside until tariff risks subside significantly.
Higher tariffs, which will slow economic growth, increase prices, and raise the possibility of job losses, have put the Federal Reserve in a pickle and lifted the odds of a policy mistake. Stagflation is a scenario that central bankers dread – do they tackle the “stag” (with rate cuts) or the “flation” (with rate hikes)? As widely expected, the Federal Reserve maintained its wait-and-see approach and left rates unchanged following its May 6-7 meeting. While tariffs should have a one-time impact on prices, potential supply chain disruptions may contribute to inflation persistence and unmoor expectations. Even so, we think the Federal Reserve will have no choice but to ease (maybe aggressively) if job losses mount and spending wanes. Fed fund futures now imply an 83 percent probability of a 25 basis point rate cut at the next FOMC meeting in June and a 17 percent probability of a 50 basis point cut.
We expect equities to remain volatile heading into the second half of the year. As a result, we continue to favor financials, given their lower first-order trade sensitivity, strong capital positions, and potential to benefit from a recovery in capital markets activity. We are also adding to defense stocks ahead of a likely sizable increase in U.S. defense spending in fiscal 2026 and sharp increases overseas. Portfolios are underweight consumer staples, as tariffs add downside risk to an already soft growth outlook. We have also become more cautious on energy as increased Saudi production adds to oversupply concerns.
For our latest full Global Investment Outlook & Strategy Update, download the pdf document.
Our broad array of investment products encompasses the complete risk spectrum – from capital preservation to capital appreciation—enabling us to meet our clients’ entire range of investment objectives.
We are committed to a disciplined, fundamental, research-driven investment process. As a result, clients can count on the firm to achieve highly competitive results in tandem with exceptional client service.
Sit Mutual Funds is a family of mutual funds covering the entire risk spectrum, from stability of principal to high growth and grounded in our well-defined, hands-on management style and disciplined investment process.