Image 1


View accessible version of this chart.

We highlighted in the last edition of this publication that while second quarter performance was positive overall, certain market dynamics gave us concern. Those concerns manifested in the third quarter, as both global equity and fixed income markets declined.

While the data continues to evolve, key drivers and themes among financial markets remain unchanged. Specifically, the forward path of inflation and monetary policy continues to be at the forefront of investors’ minds. Elevated bond yields — a sneaky byproduct of tighter monetary policy — also became a more significant headwind during the quarter, driving equity and fixed income market returns downward while also leading less interest rate-sensitive sectors to outperform. 

Accessible Version of Chart

Image 1 

(view chart)

Leaders

 Returns

Laggards

Returns

Bloomberg U.S. Corporate High Yield Index

0.5%

 

MSCI World ex-USA Large-cap Growth Index

-8.2%

 

MSCI World ex-USA Large-cap Value Index

0.2%

 

MSCI International Quality Index

-6.0%

 

MSCI USA Sector-Neutral Quality Index

-2.0%

 

Russell 2000 Growth

-5.9%

 

Take a Closer Look
Headwinds Come Home to Roost