The major equity markets (S&P 500, EFA, EEM) did well for the 4th quarter, with the US market being the shining star for 2021. We were concerned that there could be some consolidation, but it didn’t happen. The SP500 closed positive for the full year of 2021, while Developed International (EFA) and Emerging Markets (EEM) were down for the year.

Coming off of a slightly negative 3rd quarter, long and municipal bonds had a slight bounce back and booked positive performance, while the shorter-term bonds had a negative fourth quarter. Longer term bonds (TLT) ended the year positive as a whole while the shorter-term bonds ended 2021 in the red.

Sectors and Factors of note are Energy (XLE), Value (VLUE), Dividends (DGRO), and Technology (XLK). This year was absent of consistent leadership as it was hard to find a leading trend that lasted. When you look back Energy (XLE) was the sector that performed the best, but it didn’t do it every quarter and there were times when it was far from the leader. Moving into 2022 we anticipate continued volatility and potential for further downside, while remaining bullish on Energy with expectation of continued leadership.

Our overall views and catalysts have not changed from the 3rd quarter, and we continue to watch three main things: Fiscal policy, Monetary policy and interest rates. As long as we have fiscal stimulus and accommodative monetary policy, we could see the market continue to make new highs. However, the market doesn’t always go up in a straight line, and rates will not be low forever. Increased volatility is likely as we see the markets views and perceptions on these catalysts change and/or evolve.

For 2021 lower rates and easier policy could be considered the main reason for the positive US performance. As we look to 2022 however, we are starting to see the signs of tighter policies and higher rates. In this environment we will have to be more nimble and conservative, with expectation we could see a choppy market.

Please see below for further detailed analysis and chart references. If you have any questions or would like to discuss anything mentioned, please do not hesitate to reach out. We appreciate each one of you and hope 2021 was a great year.

All the best,
Syntal Investment Team

Major Markets


S&P 500 ETF (US Market) – SPY

Commentary: The S&P 500 led the major markets in performance for 2021. While the performance was broad for the fourth quarter; Technology, Real Estate, Materials and Industrials led the way. The S&P 500 also pulled away from the International indexes over the fourth quarter.

MSCI EAFE ETF (Developed International Market) – EFA

Commentary: The EAFE Index underperformed the S&P 500 in the fourth quarter, and International markets underperform US markets for 2021.

MSCI Emerging Markets ETF (Emerging Markets) – EEM

Commentary: Emerging Markets continued its underperformance for the fourth quarter. There is a potential that this sector could end up in our Opportunistic portfolio if we start to see more strength in the Materials and Energy sectors. Emerging Markets tend to do well when these sectors are doing well, so this will be our gauge to diligence inclusion.

MSCI ACWI ETF (Global Market) – ACWI

Commentary: The ACWI is a Global market ETF that is a combination of US, Developed International, and Emerging Markets. This combined index performance is being driven by US Markets.

Market Performance

The best performing market for the 4th quarter was the S&P 500, with ACWI in second, MSCI EAFE in third and MSCI Emerging Markets a distant fourth.

US Sector Performance

The best performing US sector for the 3rd quarter was Technology, with Discretionary coming in second and Real Estate coming in third. Full US sector performance for the quarter below. 

US Factor Performance

The best performing factor for the 3rd quarter was Dividend Growth (DGRO) followed by Quality (QUAL). 

Fixed Income

iShares 20 + Years Treasury Bond (Long Term Bonds) – TLT

Commentary: The 3rd quarter was relatively flat for long bonds, with the 4th quarter being a lot better from a performance standpoint. The prices moved up over most of the quarter but pulled back a little in December. As a reminder, bond prices move inversely to rates.

iShares Core US Aggregate Bond (Bonds) – AGG

Commentary: Following a flat 3rd quarter, the core bond index continued to stay flat in the fourth. As you can see by the chart above the bonds fluctuated throughout the quarter but stayed relatively flat from the start to finish.

iShares 1-3 Year Treasury Bond (Short Term Bonds) – SHY

Commentary: Short term bonds were relatively flat for the third quarter but were down in the fourth. This is most likely due to the anticipation of the Fed raising rates in 2022. As rates rise, bond process go down.

iShares National Muni Bond ETF (Municipal Bonds) – MUB

Commentary: Municipal bonds had a great period from a price perspective. This quarter had relatively low volatility while consistently going higher for the most part.

Factors in Portfolio or of Interest

iShares MSCI USA Value Factor ETF (Value) – VLUE

Commentary: We have had an Opportunistic position in VLUE since the beginning of 2021. The first two quarters saw significant outperformance, but VLUE had a harder time in the third. This factor has come back to life in the fourth however. It finished in the top of the factors’ performance line up.

iShares MSCI USA Momentum Factor ETF (Momentum) – MTUM

Commentary: Momentum had a positive third quarter but was the lowest performing factor for the fourth. The MTUM ETF is in our Strategic portfolio, and we look for momentum in Syntal Global Equity Momentum as well. This factor tends to influence our performance in the overall portfolio

iShares Core Dividend Growth ETF (Dividend) – DGRO

Commentary: We own DGRO in our Strategic portfolio, and we also have the Syntal Dividend Growth strategy that tracks and looks to outperform the ETF. We believe fixed income yields will continue to be low so we have added Dividend factor exposure to increase the cash flow while participating in the equity market.

Sectors in Portfolio or of Interest

Spider Fund Energy ETF (Energy) – XLE

Commentary: Energy was the best performing sector for 2021 and looks like it is continuing that move into 2022. There were quarters where Energy underperformed but overall it was up over 50% for 2021. We held this ETF earlier in 2021 and added it back into our Opportunistic investment sleeve at the beginning of 2022.

Spider Fund Technology (Technology) – XLK

Commentary: Technology did well overall in 2021 with the fourth quarter being a strong run for the factor to finish the year. We continue to pay attention to this sector as it drives a lot of momentum stocks.

Important Disclosure Information: 

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Syntal Capital Partners, LLC [“Syntal]), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from Syntal. Please remember to contact Syntal, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Syntal is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of the Syntal’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at Please Note: IF you are a Syntal client, Please advise us if you have not been receiving account statements (at least quarterly) from the account custodian. Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your Syntal account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Syntal accounts; and, (3) a description of each comparative benchmark/index is available upon request.