Noteworthy Developments: Global equities, as represented by the MSCI ACWI Index, appreciated 1.7% (+2.5% in USD) during August, with positive performance across all major regions. The CAD strengthened by 0.8% vs. the USD.
Global Equities: Global equities increased by 1.7% (+2.5% USD), with US large-cap equities (S&P 500) up 1.6% (+2.4% USD), international developed equities up 2.5% (+3.3% USD) and emerging market equities gaining 0.8% (+1.6% USD).
The strong performance of the S&P 500 was driven by ongoing positive AI sentiment and better than expected corporate earnings. US equity markets were also buoyed by increasing prospects for near-term interest rate cuts following weak job market reports indicated a faster-than expected cooling of the labor market. Developed equity markets’ performance was positively impacted by currency translation as returns in local currencies were 0.5%. In local currency terms, European equities were up 1.6% and Japanese equities down 2.7%. The gains in emerging markets were primarily driven by strength in Taiwan equities (+2.5%), which benefitted from semiconductor stocks’ strong performance.
Globally, growth stocks (+1.6%) and value stocks (+1.9%) both performed well. Almost all sectors delivered positive performance. Healthcare and consumer staples sectors (+4.6% and +4.1%) performed best, while energy and consumer discretionary sectors (-1.3% and -0.1%) performed worst. Within the US, small-cap stocks appreciated 6.2%, with gains driven by positive sentiment around likely US interest rate cuts as small-caps are more sensitive to rate cuts than large caps given that they carry higher debt balances.
Fixed Income : The ICE BOFA Canada Broad Market Index was up 0.4% with government bonds up 0.5%, municipal and provincial bonds up 0.4%, and corporate bonds up 0.2%. Declines in bond yields of roughly 5bps-15bps across the curve drove modest price appreciation
Alternatives: The HFRX Global Hedge Fund Index was up 0.3% (+1.1% USD), with all major strategies delivering positive performance. Global macro / trend following (+1.2%) and long/short equity (+0.7%) strategies performed best.
Manager Comments: Waterfall: +4.1%: Outperformed the HFRX Global Hedge Fund Index (+0.3%) with performance driven by general tightening in structured credit spreads coupled with outperformance from idiosyncratic positions including those in the aircraft sector.
CAD August Market Commentary
Noteworthy Developments: Global equities, as represented by the MSCI ACWI Index, appreciated 1.7% (+2.5% in USD) during August, with positive performance across all major regions. The CAD strengthened by 0.8% vs. the USD.
Global Equities: Global equities increased by 1.7% (+2.5% USD), with US large-cap equities (S&P 500) up 1.6% (+2.4% USD), international developed equities up 2.5% (+3.3% USD) and emerging market equities gaining 0.8% (+1.6% USD).
The strong performance of the S&P 500 was driven by ongoing positive AI sentiment and better than expected corporate earnings. US equity markets were also buoyed by increasing prospects for near-term interest rate cuts following weak job market reports indicated a faster-than expected cooling of the labor market. Developed equity markets’ performance was positively impacted by currency translation as returns in local currencies were 0.5%. In local currency terms, European equities were up 1.6% and Japanese equities down 2.7%. The gains in emerging markets were primarily driven by strength in Taiwan equities (+2.5%), which benefitted from semiconductor stocks’ strong performance.
Globally, growth stocks (+1.6%) and value stocks (+1.9%) both performed well. Almost all sectors delivered positive performance. Healthcare and consumer staples sectors (+4.6% and +4.1%) performed best, while energy and consumer discretionary sectors (-1.3% and -0.1%) performed worst. Within the US, small-cap stocks appreciated 6.2%, with gains driven by positive sentiment around likely US interest rate cuts as small-caps are more sensitive to rate cuts than large caps given that they carry higher debt balances.
Fixed Income : The ICE BOFA Canada Broad Market Index was up 0.4% with government bonds up 0.5%, municipal and provincial bonds up 0.4%, and corporate bonds up 0.2%. Declines in bond yields of roughly 5bps-15bps across the curve drove modest price appreciation
Alternatives: The HFRX Global Hedge Fund Index was up 0.3% (+1.1% USD), with all major strategies delivering positive performance. Global macro / trend following (+1.2%) and long/short equity (+0.7%) strategies performed best.
Manager Comments: Waterfall: +4.1%: Outperformed the HFRX Global Hedge Fund Index (+0.3%) with performance driven by general tightening in structured credit spreads coupled with outperformance from idiosyncratic positions including those in the aircraft sector.
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