USD February Market Performance

Noteworthy developments

Continued strong appreciation for global equities as the MSCI ACWI Index rose 3.2%.  Strong corporate earnings, better than expected US economic data, and declining inflation in Europe all contributed to equity market appreciation.   

Global Equities

Global equities were up 3.2%, with all regions performing well.  The S&P 500 and international developed stocks (MSCI EAFE Index) were both up 3.2% in USD (EAFE index up 4.0% in local currencies).  Emerging market equities (MSCI EM Index) increased by 2.5% in USD with strong performances by Korean and Taiwanese equities (+5.2% and +7.9% respectively) which benefitted from strong business fundamentals, especially by semiconductor companies on the back of robust AI demand.  Globally, value stocks (+4.3%) outperformed growth stocks (+2.1%).  From a sector perspective, energy, utilities and financials performed best (+7.9%, +5.1% and +4.3%) while consumer discretionary stocks performed worst (+0.7%).

Fixed Income

The benchmark US-Aggregate Bond index was up 0.9% for the month as interest rates declined.  US Treasuries (65% of the benchmark) were up 0.6%, and investment-grade corporate credit (roughly 25% of the index) was up 1.3%.  High-yield bonds were up 1.2% as modestly declining rates augmented high coupon income.  Leveraged loans were up 0.8%, with performance driven by high coupon income (stable base rates).

Alternatives

The HFRX Global Hedge Fund Index was up 1.3% for the month, with substantially all strategies delivering positive performance.  Macro / trend-following strategies performed best at +2.5% while equity market-neutral and multi-strategy funds performed worst (+0.7% and +0.4%).

Commentary

Carrhae: +5.4%

Relative outperformance vs. MSCI EM Index (+2.4%) without performance driven by Korean and Taiwan semiconductor posit ions as well as global gold miners (which appreciated significantly as gold prices have risen substantially).