Supply Chain Issues Could Recover In Q3 2022

Aggregate Inventories Have Recovered but Auto Inventories Remain Under Pressure:

Supply chain issues have been a well-publicized event that has been hard to predict. While there have been improvements in supply chain management since the harsh production halts enforced during the pandemic, semiconductors continue to be a bottleneck in numerous industries, especially automotive.

Supply Chain Management: Aggregate Inventories Have Recovered but Auto Inventories Remain Under Pressure

The pandemic began in early 2020 and resulted in a whipsaw effect that impacted both supply and demand. With governments enforcing strict shelter in place orders, production of goods declined in 2020 but consumers still demanded goods. Government stimulus further bolstered demand and there was less of a contraction in total demand than there otherwise would have been. This dynamic led to the supply shortage that many sectors have been working through.

Chart shows 50-year Trend of Changes in Private Inventories
Source: U.S. Bureau of Economic Analysis — I/O FUND
Chart shows Three-Year Trend of Changes in Private Inventories
Source: U.S. Bureau of Economic Analysis — I/O FUND
Chart: Ratio of Private Inventories to Final Sale of Domestic Business
Source: U.S. Bureau of Economic Analysis — I/O FUND
Chart: Domestic Auto Inventories
U.S. Bureau of Economic Analysis — I/O FUND
Chart: Domestic Auto Inventories to Sales Ratio
Source: U.S. Bureau of Economic Analysis — I/O FUND
Chart shows the annual change in Global Automotive Ad Spend
Source: Dentsu Global Ad Spend Report — I/O FUND
Chart: Automotive Manufacturing Total Inventories
Source: U.S. Census Bureau — I/O FUND

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Beth Kindig

CEO and Lead Tech Analyst for the I/O Fund with cumulative audited results of 141%, beating Ark and other leading active tech funds over four audit periods in 2