CAD October Market Performance

Noteworthy Developments

Equity markets (MSCI ACWI Index) declined by 0.9% in CAD (-3.0% in USD) during October with declines driven primarily by rising interest rates, especially in the US. The CAD weakened by 2.2% vs. the USD during the month.

Global Equities

Global equities were down 0.9% in CAD (-3.0% in USD) with widespread declines across major regions in USD terms. The S&P 500 was flat in CAD (-2.1% in USD) as longer-term Treasury yields continued to increase following strong economic data and large volumes of Treasury bond issuance. The US 10-year Treasury bond rose by 32bps from 4.57% to nearly 4.89% over the month. International developed stocks
(MSCI EAFE Index) were down 2.0% in CAD (-4.1% in USD) as Eurozone macroeconomic data continued to weaken, especially in Germany. Emerging market equities (MSCI EM Index) were down 1.8% in CAD (-3.9% in CAD) with Chinese equities (MSCI China Index) down 2.2% in CAD (-4.3% in USD) and Korean equities
(MSCI Korea Index) down 4.9% in CAD (-7.0% in USD). Globally, growth stocks (-0.5% in CAD and -2.6% in USD) modestly outperformed value stocks (-1.4 in CAD and -3.5% in USD). Technology (+1.2% in CAD and -1.0% in USD) was the best performing sector while consumer discretionary (-2.7% in CAD and -4.8% in USD) was the worst performer.

Fixed Income

The ICE BOFA Canada Broad Market Index was up 0.4% for the month in CAD. Government, municipal, and corporate bonds were all up between 0.3% and 0.5% for the month. Performance was driven by coupon income as Canadian interest rates remained relatively stable over the month.

Alternatives

The HFRX Global Hedge Fund Index was up 1.4% in CAD (-0.8% in USD). Most strategies were up 1.0% in CAD but down roughly 1.0% for the month in USD. Global macro / trend following strategies performed best (+2.4% in CAD and +0.3% in USD) and convertible arbitrage strategies performed worst (-0.9% in CAD and -3.0% in USD).

Commentary

Alphadyne: +5.2% in CAD (+3.0% in USD)

Outperformed HFRI Global Hedge Fund Index (+1.4% in CAD and -0.8% in USD) with strong performance driven by both directional and relative value interest rate bets.

Eminence: -5.6% in CAD (-7.7% in USD)

Performance driven by large declines in cannabis equity holdings (-20% to -35%) and other large positions such as Zillow (-20%).