Noteworthy Developments
Global equities, as represented by the MSCI ACWI Index, appreciated strongly by 4.5% during June, with all major regions performing strongly.
Global Equities
Global equities appreciated by 4.5%, with US large-cap equities (S&P 500) up 5.1%, international developed equities up 2.2% and emerging market equities gaining 6.1% in USD terms.
The strong performance of the S&P 500 was driven by a) ongoing positive AI sentiment following strong earnings from Nvidia and Broadcom and high AI demand from companies and governments, b) benign inflation reports with no negative effects from tariffs so far, c) increased chances of interest rate cuts in the fall of 2025 based on Fed comments, d) maintaining the current tariff policy with no major rate hikes or rhetoric escalations, and e) rising chances of passing pro-growth tax legislation. The robust gains in emerging markets were mainly due to stocks in Korea (+17.6%) and Taiwan (+9.7%), both benefiting from the outsize performance of key semiconductor stocks.
Globally, growth stocks (+5.1%) modestly outperformed value stocks (+3.8%). Technology and communication services sectors (+9.5% and +6.9%) performed best, while health care and consumer discretionary sectors (+1.5% and +1.2%) performed worst.
Fixed Income
The US Aggregate Bond Index was up 1.5%, with performance driven by coupon income, and price appreciation driven by declining bond yields and compressing spreads. US government bonds were up 1.3% as bond yields declined by 15bps to 20 bps across the curve. Investment-grade corporate bonds appreciated by 1.8% with declining base rates and tighter spreads contributing to strong performance. High-yield bonds were up 1.9% with positive contributions from high coupon rates, declines in base yields, and spread tightening of 25bps. Leveraged loans were up 0.8% with strong performance driven by high current income coupled with modest spread tightening.
Alternatives
The HFRX Global Hedge Fund Index was up 1.1%, with most strategies delivering positive performance. Long/short equity (+1.4%) and convertible arbitrage (+2.1%) strategies performed best.
Manager Comments
Lancaster: +9.6%
Outperformed the MSCI Europe Index (+2.3%) with outperformance driven by idiosyncratic positions with several responding favorably following earnings results.
USD June Market Commentary
Noteworthy Developments
Global equities, as represented by the MSCI ACWI Index, appreciated strongly by 4.5% during June, with all major regions performing strongly.
Global Equities
Global equities appreciated by 4.5%, with US large-cap equities (S&P 500) up 5.1%, international developed equities up 2.2% and emerging market equities gaining 6.1% in USD terms.
The strong performance of the S&P 500 was driven by a) ongoing positive AI sentiment following strong earnings from Nvidia and Broadcom and high AI demand from companies and governments, b) benign inflation reports with no negative effects from tariffs so far, c) increased chances of interest rate cuts in the fall of 2025 based on Fed comments, d) maintaining the current tariff policy with no major rate hikes or rhetoric escalations, and e) rising chances of passing pro-growth tax legislation. The robust gains in emerging markets were mainly due to stocks in Korea (+17.6%) and Taiwan (+9.7%), both benefiting from the outsize performance of key semiconductor stocks.
Globally, growth stocks (+5.1%) modestly outperformed value stocks (+3.8%). Technology and communication services sectors (+9.5% and +6.9%) performed best, while health care and consumer discretionary sectors (+1.5% and +1.2%) performed worst.
Fixed Income
The US Aggregate Bond Index was up 1.5%, with performance driven by coupon income, and price appreciation driven by declining bond yields and compressing spreads. US government bonds were up 1.3% as bond yields declined by 15bps to 20 bps across the curve. Investment-grade corporate bonds appreciated by 1.8% with declining base rates and tighter spreads contributing to strong performance. High-yield bonds were up 1.9% with positive contributions from high coupon rates, declines in base yields, and spread tightening of 25bps. Leveraged loans were up 0.8% with strong performance driven by high current income coupled with modest spread tightening.
Alternatives
The HFRX Global Hedge Fund Index was up 1.1%, with most strategies delivering positive performance. Long/short equity (+1.4%) and convertible arbitrage (+2.1%) strategies performed best.
Manager Comments
Lancaster: +9.6%
Outperformed the MSCI Europe Index (+2.3%) with outperformance driven by idiosyncratic positions with several responding favorably following earnings results.
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