November Market Update: Clarity, Coordination, and Credit Quality

Insights

What Changed and What to Check

Last month, markets saw movement in both short-term yields and equity sectors. Our focus remains on reinforcing the clarity and disciplined planning we bring to your portfolio, ensuring your strategy is built to withstand short-term volatility.

Fixed Income

The fixed income market reflected investor risk aversion in recent weeks, causing U.S. Treasury yields to dip. During an October 14, 2025, speech, Fed Chair Powell stated that the outlook for employment and inflation “does not appear to have changed much” since the September FOMC meeting. He noted early data suggest activity growth “may be on a somewhat firmer trajectory than expected” but that labor market indicators have “continued their downward trajectories.” Given this mixed outlook, we continue to focus on high credit quality and managing duration risk, finding risk-adjusted opportunities in short- and intermediate-duration strategies.

Equities

The equity market was somewhat choppy last week, though good corporate earnings were generally rewarded, allowing the S&P 500 Index to post a decent gain, as noted in the Goldman Sachs Market Monitor. While certain pockets of the economy may be slowing, the financial system and overall corporate profitability remain strong underpinnings for the market. We continue to evaluate growth in major technology companies, noting that much of the appreciation is supported by sustained profit growth. Nevertheless, high valuations require us to maintain a disciplined approach and be prepared for short-term swings in sentiment.

Tomoro’s Focus: Disciplined Private Lending

Private credit offers an attractive blend of higher yield and lower volatility compared to traditional fixed income. This is often because its loans use floating interest rates and include contractual protections, leading to favorable risk-adjusted returns. Direct lending specifically offers a portfolio-diversifying income boost. 

Recent headlines about bankruptcies, like TriColor and First Brands, highlight the importance of Tomoro’s disciplined process for evaluating private credit managers and funds. We assess risk based on numerous factors, ranging from portfolio size and diversity to underwriting standards and debt seniority.

For example, the managers we select, such as Golub Capital, had no exposure to these specific loans. The advantages of being a private lender in general – access to more information, longer diligence timelines, more control over covenants and active engagement in the case of an underperforming borrower. Golub positions itself as a “specialist” manager compared to a “generalist.” This refers to the firm’s focus on specializing in sponsor finance to provide direct lending and credit asset management solutions for companies backed by private credit sponsors. Their ability to access more information and maintain control over loan covenants matters most in a stressed environment, as also reflected in BlackRock’s Weekly Commentary. 

The GCRED fund continues to perform well, up 6.35% year-to-date through August 31, with zero loans on non-accrual status, reflecting the success of their selective strategy.

Office Note

We have attached the updated GCRED Fact Sheet and the Golub Capital Middle Market Report from Q3. This report provides valuable insights into the continued strong earnings and revenue growth of a set of our borrowers.

Want to review your plan in light of recent market conditions? Contact us anytime.

Disclosure: This material is for informational purposes. It is not individualized investment, tax, or legal advice. All investing involves risk. Investment strategies depend on each client’s goals, timeline, and risk tolerance. Past performance is not indicative of future results.

Sources:

Goldman Sachs Market Monitor Week Ending 10.24.25

BlackRock InvestmentGolden Sachs.pdf Institute – Weekly Commentary – October 27, 2025

Golub Capital Fact Sheet (Aug 2025)

Golub Capital Middle Market Report from Q3