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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. 

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Bloomberg U.S. Corporate High Yield Index



MSCI World ex-USA Large-cap Growth Index



MSCI World ex-USA Large-cap Value Index



MSCI International Quality Index



MSCI USA Sector-Neutral Quality Index



Russell 2000 Growth



Take a Closer Look
Headwinds Come Home to Roost