USD April Market Performance

Noteworthy Developments 

Global equities retreated as the MSCI ACWI Index declined 3.3% in USD. A sharp rise in US interest rates driven by higher-than-expected inflation overshadowed strong corporate earnings.  

Global Equities 

Global equities declined 3.3% with significant differences in performance between regions. The S&P 500 was down 4.1% as US Treasury yields sharply increased by 40bps-50bps across the curve.  The yield increases were driven by higher-than-expected inflation reports, which has led to investors adjusting expectations for fewer rate cuts in 2024 than originally forecast.  International developed equities (MSCI EAFE Index) were down 2.6% in USD (-0.9% in local currencies) with Japanese equities down more than European equities. Emerging market equities were up 0.5% in USD (+1.4% in local currencies) with strong performance from Chinese equities (+6.6% in USD) driven by better-than-expected Chinese growth and monetary stimulus. Globally, both growth (-3.6%) and value stocks (-3.0%) experienced declines. Almost all sectors experienced declines during the month with technology performing worst (-5.6%). Energy was the only sector delivering positive performance at +0.6%.  

Fixed Income 

The benchmark US-Aggregate Bond index was down 2.5% for the month as interest rates swiftly rose. US Treasuries (65% of the benchmark) were down 2.3%, and investment-grade corporate credit (roughly 25% of the index) was down 2.6%. High-yield bonds were down 0.9% as increased base rates offset high coupon income. Leveraged loans were up 0.7%, with performance driven by high coupon income (stable base rates). 

Alternatives 

The HFRX Global Hedge Fund Index was down 0.5% for the month, with substantially all strategies delivering negative performance. Merger-arbitrage (-1.7%) and convertible-arbitrage (-1.5%) strategies performed worst. 

Manager Comments

North Rock: +1.4%

Outperformance vs. HFRX index (-0.5% ) due to idiosyncratic performance ac ross both long and short equ ity bets across various sectors.

Waterfall: +1.4%

Outperformance vs. HFRX index (-0.5%) due to spread tightening across Waterfall’s sectors and across idiosyncratic structured credit positions.