The first quarter started with a continuation of the rally from last quarter across U.S. and global markets and maintained that momentum until late February, when the markets headed south as “Operation Epic Fury” commenced with an attack on Iran by the joint efforts of the U.S. and Israeli military forces. All markets, except for the S&P 500 (U.S. large-cap market), found support near the end of the quarter as it appeared most of the military objectives had been obtained with minimal damage inflicted by the Iranian retaliatory attacks. The S&P 600 Small Cap index, the S&P 400 Mid Cap Index, and the S&P International 700 Index all ended the quarter with positive returns of 3.58%, 2.50%, and 0.54%, respectively, while the S&P 500 index posted a loss of 4.35%.

‍

‍

Over the past 12 months, the stock market witnessed a generally positive trajectory across all the major equity indexes until late February, when the U.S. and global markets started to fall in tandem with the bombs over Iran. The international markets represented by the S&P International 700 index had the strongest performance over the past year, with a total return of 28.21%. The S&P 500 still experienced strong growth during this period, turning in a one-year return of 17.77% on a total return basis. The S&P 400 and S&P 600, representing mid-cap and small-cap companies, also enjoyed overall gains in the past year of 17.33% and 20.56%, respectively. Overall, the past 12 months exhibited positive market sentiment even in the face of continued headwinds of inflation numbers not falling as fast as the markets had previously hoped and interest rates not falling as much as most analysts had predicted. Even though we are still in the early innings of the current bull market, we could easily see a correction in the next few months as we see what effect the Iran war has on the economy and the markets. Even with this warning in mind, we recommend investors remain invested and stay focused on the long-term opportunities in a well-diversified global portfolio, as the probability of positive returns over the next 12 to 24 months is still extremely high.

‍

‍

Economic Indicators and Calendars

‍

Inflation came in at 0.20% (month-over-month) in January, beating expectations of a 0.30% increase. The numbers came out in line with expectations for February at 0.30%, but the expectation for inflation to spike in March due to the immediate rise in oil and energy prices, due to the Iran war and their retaliation by shutting down shipping traffic in the Strait of Hormuz, was realized by being up 0.90% but short of the expected rise of 1%. As of the end of the first quarter, the headline Inflation number surged from2.4% to 3.3%, driven by higher energy costs during the first month of the Iran war. We will likely see month-over-month numbers come back down in the next few months as the Iran war winds down and the Strait of Hormuz is reopened, one way or another. Core inflation, which strips out volatile food and energy, only ticked up from 2.5% to 2.6%.

(Source: Bloomberg) (A= Advance; S= Second: T= Third)

Due to the government shutdown in October and November, the initial GDP report for the fourth quarter was expected to come in at 2.8% but fell well short of that number at only 1.4% when it was released in February. When the “second” release came in last month, GDP growth came in even lower than the expectation of 1.4% at only 0.7% for the fourth quarter. The forecast was revised to 0.7% for the third release and continued to disappoint when it was published on April 9th at 0.5%. The debate among economists and market pundits during the past quarter has been focused on whether last year’s government shutdown would cause a recession, but quickly turned to how fast the Iran war would bring on a recession. Time will tell if the odds of a recession are rising.

The yield curve is no longer inverted, but there is now a fear of a recession brought on by a slowing labor market, slower consumer spending, and uncertainty over the economic effects of the Iran war and the rise in oil prices and their effect on the U.S. consumer.

(Source: Bloomberg)

The unemployment rate fell to 4.3% in January, primarily due to seasonal hiring beating the expectation of 4.4%; this reversed course in February, when the unemployment rate went back to 4.4%, when the expectation was for it to remain at 4.3%. In March, we saw the same whipsaw action when the expectation was for the unemployment rate to remain at 4.4%, when it fell to 4.3%. Although we are still above the 4% level, it’s possible we could see the unemployment rate begin a downward path if the economy remains resilient in 2026.

Nonfarm Payrolls had a sporadic showing during the past three months, with January coming in at 130k jobs, which was above the estimate of 65k. Then, in February, 92k jobs were lost when 55k jobs were expected to be created. The new job numbers bounced back in March with new job expectations of 67k, but we actually saw jobs grow by 178k.

‍

Source: Bloomberg

The Federal Open Market Committee continued down the path of sitting on its hands by keeping the Federal Funds Rates “unchanged” during the first two meetings of 2026. Based on Chair Powell’s recent comments, we should not be surprised if they pause rate cuts for the remainder of the year even if he is replaced as the chairman in the next couple of months. Although many analysts fully expect the rate cut cycle to continue in 2026, with at least one rate cut, it will not be surprising for a pause, as a majority of those on the Federal Reserve Board do not favor any rate cuts with the fear of inflation still on the horizon. The current expectation is for the terminal rate to be in the 3.25% range by mid-2027 due to ongoing inflationary concerns. While a cooling labor market would typically justify rate cuts, concerns about inflation remain. Instead of an aggressive easing policy, the Fed has been extremely slow in its moves, waiting for clearer data on both inflation and broader economic conditions.

• BLES outperformed the S&P Global 1200 index during the first quarter with a total return of 2.30% vs -2.79% for the global index.
• With strong performance in the emerging markets as well as strong positive performance in the U.S. large cap exposure of the fund, BLES was highly correlated with the global index but outpaced the global index dramatically.
• We believe that the tilt to the smaller end of the large-cap spectrum of BLES will continue to be in favor as the global economic numbers remain strong over the next six to 12 months.

Source: Bloomberg

Inspire Investing, LLC serves as the investment adviser to certain proprietary ETFs used in Inspire portfolios. Inspire receives management fees from these ETFs, creating a potential conflict of interest. Inspire seeks to mitigate this conflict through policies and procedures that ensure recommendations are made in clients' best interests and consistent with their unique goals and risk profiles. Additional details can be found in Inspire's Form ADV Part 2A. Past performance is not indicative of future results. All performance figures referenced herein are historical and may not reflect current or future market conditions. Actual investor outcomes may vary. There is no assurance that any investment strategy will achieve its objectives or avoid losses.

• FDLS continued the strong rally that started in mid-November and outpaced the global market during the first quarter of 2026, as measured by the MSCI All Country World Index,  outperforming the benchmark in the quarter by 684 bps with returns of 3.73% and -3.10%, respectively.
• We continue to believe that the globally diversified allocation of FDLS to U.S. large, mid, and small cap, international, and emerging markets stocks, as well as the disciplined multi-factor approach, will be a good complement to our other ETFs as the bull market continues its upward momentum over the next 12 to 24 months.

Source: Bloomberg

Inspire Investing, LLC serves as the investment adviser to certain proprietary ETFs used in Inspire portfolios. Inspire receives management fees from these ETFs, creating a potential conflict of interest. Inspire seeks to mitigate this conflict through policies and procedures that ensure recommendations are made in clients' best interests and consistent with their unique goals and risk profiles. Additional details can be found in Inspire's Form ADV Part 2A. Past performance is not indicative of future results. All performance figures referenced herein are historical and may not reflect current or future market conditions. Actual investor outcomes may vary. There is no assurance that any investment strategy will achieve its objectives or avoid losses.

• GLRY remained highly correlated to the S&P 400 Midcap index in the volatile first quarter, ultimately outperforming the index with a return of 4.06% vs 2.50%.
• The first quarter showed positive momentum in the first two months of the quarter, but that momentum reversed in March as the markets pulled back with the commencement of the Iran war.
• Although the growth factors should come back in favor in 2026, they could remain soft in the coming months if the economy shows signs of slowing. However, the methodology will not change as we will continue to look for great companies using the FEVRR methodology. We will find companies that have strong financial health and sustainable earnings, which allow them to make strategic decisions in a similar or lower rate environment. We will find companies that have attractive valuations and price momentum, which assist with entry and exit points.

Source: Bloomberg

Inspire Investing, LLC serves as the investment adviser to certain proprietary ETFs used in Inspire portfolios. Inspire receives management fees from these ETFs, creating a potential conflict of interest. Inspire seeks to mitigate this conflict through policies and procedures that ensure recommendations are made in clients' best interests and consistent with their unique goals and risk profiles. Additional details can be found in Inspire's Form ADV Part 2A. Past performance is not indicative of future results. All performance figures referenced herein are historical and may not reflect current or future market conditions. Actual investor outcomes may vary. There is no assurance that any investment strategy will achieve its objectives or avoid losses.

• ISMD outperformed both the S&P Small Cap 600 Index and the S&P Midcap 400 Index for the first quarter, with a return of 3.92% vs the small cap index at 3.58% and vs the S&P 400 Mid Cap Index that was up only 2.50%.
• The mid-cap market and the U.S. small-cap market rallied in the last few weeks of the fourth quarter and maintained that momentum into the first quarter of 2026.
• The equal weighting of the 500 stocks in ISMD performed in line with the blend of the market cap-weighted small and midcap indexes, showing that the correlation between the small and midcap markets and ISMD remains strong.
• We believe that the rotation to the broader market is gaining wider acceptance and gaining momentum. This should benefit ISMD as the U.S. large-cap and mega-cap stock investors appear to be expanding their appetite for smaller stocks.

Source: Bloomberg

Inspire Investing, LLC serves as the investment adviser to certain proprietary ETFs used in Inspire portfolios. Inspire receives management fees from these ETFs, creating a potential conflict of interest. Inspire seeks to mitigate this conflict through policies and procedures that ensure recommendations are made in clients' best interests and consistent with their unique goals and risk profiles. Additional details can be found in Inspire's Form ADV Part 2A. Past performance is not indicative of future results. All performance figures referenced herein are historical and may not reflect current or future market conditions. Actual investor outcomes may vary. There is no assurance that any investment strategy will achieve its objectives or avoid losses.

• PTL outperformed the S&P 500 Index by 601 bps with returns of 1.66% and -4.35, respectively, for the first quarter.  
• The outperformance of PTL to the S&P 500 Index is due to exposure to smaller large-cap companies that have shown upside momentum during the first quarter, as the mega-cap growth stocks that dominate the S&P 500 Index have been the laggards so far in 2026.
• We believe that as the bull market continues the upward momentum in 2026, PTL is well positioned to continue to outperform the S&P 500 due to the tilt to the smaller side of the large market cap spectrum, as well as its strong core positioning benefiting from both value and growth exposure.

Source: Bloomberg

Inspire Investing, LLC serves as the investment adviser to certain proprietary ETFs used in Inspire portfolios. Inspire receives management fees from these ETFs, creating a potential conflict of interest. Inspire seeks to mitigate this conflict through policies and procedures that ensure recommendations are made in clients' best interests and consistent with their unique goals and risk profiles. Additional details can be found in Inspire's Form ADV Part 2A. Past performance is not indicative of future results. All performance figures referenced herein are historical and may not reflect current or future market conditions. Actual investor outcomes may vary. There is no assurance that any investment strategy will achieve its objectives or avoid losses.

• Performance Overview

The Inspire Tactical Balanced ETF (NYSE: RISN) returned -0.92% for the quarter, bringing its annualized performance to 6.16% since inception on July 15, 2020. RISN slightly trailed its benchmark this quarter—the S&P Target Risk Moderate TR Index posted a -0.67% return.

• Capital Appreciation Sleeve

RISN maintained an 80% equity allocation throughout the quarter. Our equity strategy targets U.S. companies that score highly on the Inspire Impact Score, biblically aligned businesses that are primarily mid- to large-cap with strong fundamentals: consistent revenue and profit growth, low debt, and attractive valuations.

During the quarter, we rebalanced the equity holdings to sharpen alignment with our fundamental and moral filters. These periodic adjustments

• Principal Preservation Sleeve

The remaining 20% sits in short-term U.S. government bonds, providing a defensive buffer. We removed the floating rate component this quarter in anticipation of potential rate cuts ahead.

We're also watching gold. Current prices are elevated, but a meaningful pullback could create a compelling entry point for this sleeve.

• Looking Ahead

Our allocation remains 80% equities/20% fixed income, but we're actively evaluating a shift back to 70/30 if markets become overpriced. Our long-term objective is unchanged: preserve principal, grow capital over time, and stay aligned with biblical values.

Source: Bloomberg

Inspire Investing, LLC serves as the investment adviser to certain proprietary ETFs used in Inspire portfolios. Inspire receives management fees from these ETFs, creating a potential conflict of interest. Inspire seeks to mitigate this conflict through policies and procedures that ensure recommendations are made in clients' best interests and consistent with their unique goals and risk profiles. Additional details can be found in Inspire's Form ADV Part 2A. Past performance is not indicative of future results. All performance figures referenced herein are historical and may not reflect current or future market conditions. Actual investor outcomes may vary. There is no assurance that any investment strategy will achieve its objectives or avoid losses.

• WWJD was up 1.24% in the first quarter, outperforming the S&P International 700 TR Index return of 0.54%, a difference of 70 basis points.
• Being highly correlated with the index during the quarter shows that the diversification of the fund, with only 200 positions, is well-positioned to compete against the international index with 700 positions in the coming year.
• We remain confident that the discipline of the fund should allow for outperformance of WWJD in the coming year, as it is equally weighted, and the index is market-cap weighted.

Source: Bloomberg

Inspire Investing, LLC serves as the investment adviser to certain proprietary ETFs used in Inspire portfolios. Inspire receives management fees from these ETFs, creating a potential conflict of interest. Inspire seeks to mitigate this conflict through policies and procedures that ensure recommendations are made in clients' best interests and consistent with their unique goals and risk profiles. Additional details can be found in Inspire's Form ADV Part 2A. Past performance is not indicative of future results. All performance figures referenced herein are historical and may not reflect current or future market conditions. Actual investor outcomes may vary. There is no assurance that any investment strategy will achieve its objectives or avoid losses.

Certain statements may include forward-looking information based on current beliefs, expectations, and assumptions. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. Inspire undertakes no obligation to update or revise any forward-looking statements.

• IBD was down 0.33% in the first quarter, slightly underperforming the fixed income benchmark of the Bloomberg Barclays U.S. Intermediate Corporate Index, which was down only 0.22%.  
• The parallel rise across the entire yield curve brought the most pressure to intermediate bonds in the first quarter, which hurt IBD  as well as other investment-grade bond funds in their peer group.
• With the Federal Reserve having paused its process of lowering interest rates during the past quarter, the yield curve moved upward across maturities from 3 months to 30 years. We are now expecting the FOMC to remain on pause for rate reductions until Chairman Powell is replaced, if not for the remainder of 2026, as they are more concerned about inflation than about the weakening economy.

Source: Bloomberg

Inspire Investing, LLC serves as the investment adviser to certain proprietary ETFs used in Inspire portfolios. Inspire receives management fees from these ETFs, creating a potential conflict of interest. Inspire seeks to mitigate this conflict through policies and procedures that ensure recommendations are made in clients' best interests and consistent with their unique goals and risk profiles. Additional details can be found in Inspire's Form ADV Part 2A. Past performance is not indicative of future results. All performance figures referenced herein are historical and may not reflect current or future market conditions. Actual investor outcomes may vary. There is no assurance that any investment strategy will achieve its objectives or avoid losses.

1. Inflation and Central Bank Response

The Fed paused its process of lowering interest rates during the first quarter after lowering rates in December. Although core inflation spiked to 3.3% during the quarter, we will likely see that fall as soon as the Iran war is resolved and energy markets return to normal. However, we may not see any more interest rate decreases in 2026, depending on what the new FOMC chairman does when he takes over for Chairman Powell.

2. GDP, Yield Curve, Employment, & Consumer Confidence

The yield curve reversed its fall and climbed in a parallel fashion due to no interest rate cuts during the most recent FOMC meetings, as well as the increased fear of inflation due to the energy distribution in the Persian Gulf. Employment numbers showed weakness, but a recession may not be on the immediate horizon in the coming year. Total job openings continue to tick down, and the Consumer Sentiment, measured by the University of Michigan Consumer Sentiment Index, has steadily been falling since hitting a resistance point at 61.8 in July and is now at 47.6 as of the most recent release on April 10th. We are also watching the GDP number, which fell to 0.5% in the final revised number for the fourth quarter that was released on April 9.

3. Geopolitical Risks

The global capital markets continue to face several geopolitical risks as we move through 2026, which could significantly impact investor sentiment and market stability. The biggest new concern we are watching is the Iran war that started in late February and how that may be resolved in the coming weeks. The old concerns are also still present, but just not getting the attention of the media, such as the ongoing war between Russia and Ukraine. It does not appear that Putin is serious about negotiating a lasting peace while the United States and Israel are actively involved in keeping the Iranian regime from getting a nuclear weapon or continuing to threaten the entire Middle East. These conflicts could weigh on the geopolitical environment for the next several months. We believe that volatility in stock prices will remain high and may be driven by new issues that we haven’t even considered yet. As usual, we will closely monitor global and domestic developments and assess their potential impacts on our investment strategies.

Certain statements may include forward-looking information based on current beliefs, expectations, and assumptions. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. Inspire undertakes no obligation to update or revise any forward-looking statements.

We believe that we are still in the early innings of the bull market and are thankful we experienced good results from our ETFs in the past quarter, even with all of the global instability we see in our world today. The good news is that our God is still on the throne and in control. With the strong market performance over the past year as well as over the past quarter, we would not be surprised to see a correction of -10% or more in the next 3 to 9 months as investors look to take profits or rebalance their portfolios in light of all that is going on in the world. However, we still expect the broader large-cap market, as well as the small and mid-cap markets, to show upside potential in the next 12 to 24 months.  We will always face headwinds, but the market almost always ‘climbs a wall of worry’, so we need to remain patient and stay focused on long-term opportunities.

Whatever may come, our Lord is still in control. We remain thankful for the provision, protection, and blessings that we receive from our Heavenly Father and are looking expectantly to what God has in store for the remainder of 2026 and beyond.

We are thankful for each of you for bringing Glory and Honor to our Heavenly Father and our Savior Jesus Christ as you serve your clients through Biblically Responsible Investing.

‍

Inspire Investing, LLC serves as the investment adviser to the Inspire ETFs mentioned in this document. As such, Inspire receives management fees from these funds. This creates a conflict of interest as the firm has a financial incentive to promote its proprietary funds. Inspire seeks to mitigate this conflict through disclosure and a fiduciary duty to recommend investments suitable for clients.

Certain statements contained in this document may be forward-looking in nature and based on current expectations, estimates, and projections. Such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual outcomes may differ materially.

This content is provided for educational and informational purposes only and should not be considered personalized investment advice. Inspire does not provide legal, tax, or accounting advice. Please consult your own advisor regarding your specific situation.