First and foremost, I hope you and your families are safe and well. As I write this, the world continues to struggle through a global pandemic and protests have erupted in the United States — fueled by outrage over racial injustice. We would like to affirm our commitment to unity and fairness. Our company was created for rural electric cooperatives, organizations founded on a core set of principles that include concern for community and cooperation. We share those values. In support of this vision, RE Advisers, the investment manager for Homestead Funds, seeks to maintain a diverse, inclusive, welcoming workplace where we strive to provide each of our clients the same level of care and attention. We stand against racism and oppression and add our voice to those calling for equal justice.
As we saw in the first quarter, the COVID-19 pandemic and corresponding shutdown of economies throughout the world pushed financial markets into a broad-based decline. Now most of the way through the second quarter, the economy is showing some early signs of recovery. Jobless claims are still very high but trending lower, with May’s data an improvement over April’s. Most indicators of consumer spending and confidence are still far short of pre-crisis levels. States are beginning to reopen, which should help spur growth, but we don’t expect a full return to a more normal economic backdrop until there is a vaccine or other medical solution.
There are potentially other headwinds for the economy and markets. Recently, we have seen a resurgence in trade tensions between the U.S. and China as the U.S. dialed up its rhetoric, accusing the country of covering up the outbreak and in this way allowing it to spread globally. The social justice protests in response to the death of George Floyd on May 25 while in police custody may also weigh on the economy’s recovery. Widespread gatherings could trigger a second virus outbreak or negatively affect consumer confidence.
Like you, all of us at Homestead Funds are mindful of our families and friends and doing what we can to help them through these difficult times. Accordingly, we devoted this issue of Horizons to the topics of comfort and care. What resources and guidance can we provide our shareholders? What information can we share that will help you maintain a healthy, long-term perspective on opportunities and risks in the financial markets?
With travel disrupted and social distancing requirements still in place, Homestead Funds employees continue to work remotely. We made this transition smoothly and we are fully operational. Our registered representatives are available to help, just as they were in the weeks and months before the COVID-19 outbreak. You can reach them at 800.258.3030, option 2.
Thank you for your investment. We continue to work hard every day to maintain your trust and confidence.
Mark D. Santero
CEO, President and Direct for Homestead Funds