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CAD September Market Performance

CAD September Market Performance

Noteworthy Developments

Global equities, as measured by the MSCI ACWI Index, posted a strong gain of 2.6% (2.3% in USD), though performance varied significantly across regions. The US Federal Reserve implemented its first interest rate cut of 50 basis points during the month, while the Canadian dollar weakened by 0.2% against the US dollar.

Global Equities

Global equities rose 2.6% with US large-cap stocks (S&P 500) up 2.3%. International developed markets (MSCI EAFE Index) gained 1.1%, but fell slightly in local currencies (-0.2%). Emerging market equities surged by 7.0%, led by a 24.2% jump in Chinese stocks, driven by the announcement of substantial government stimulus measures. Growth stocks (2.8%) and value stocks (2.4%) performed relatively in line with each other. The best-performing sectors were consumer discretionary (7.7%) and communication services (5.6%), powered by explosive rallies in key Chinese stocks like Alibaba and Tencent. On the other hand, the energy (-2.9%) and healthcare (-2.5%) sectors underperformed.

Fixed Income

The ICE BofA Canada Broad Market Index gained 1.8%, benefiting from a sharp drop in interest rates. Canadian government bonds appreciated by 1.5%, while provincial and municipal bonds rose 1.9%. Corporate bonds outperformed, rising 2.1%.

Alternatives

The HFRX Global Hedge Fund Index increased by 1.2%, with most strategies delivering positive returns. Convertible arbitrage and global macro/trendfollowing strategies performed best, both up 2.0%, while merger arbitrage strategies lagged, falling by -0.2%.

Manager Comments

Carrhae: 8.9%

Outperformed the MSCI ACWI Index (2.5%) with gains largely driven by exposure to emerging markets (7.0%) and specific positions in Indian equities, Thai banks, and Korean memory manufacturers.

Eminence: 6.1%

Outperformed both the MSCI World Index (2.0%) and the Russell Mid Cap Index (2.4%), driven by strong idiosyncratic performance from positions that had previously underperformed.

Linden: 3.3%

Outperformed the HFRX Global Index (1.2%), benefiting from narrowing credit spreads and strong results from new convertible bond issuances at favorable terms.

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