Noteworthy Developments: Global equities, as represented by the MSCI ACWI Index, appreciated 2.2%, with positive performance across all major regions.
Global Equities: Global equities increased by 2.2%, with US large-cap equities (S&P 500) up 2.4%, international developed equities up 1.2% and emerging market equities gaining 4.2%.
The strong performance of the S&P 500 was driven by ongoing positive AI sentiment, better-than-expected corporate earnings, and an additional interest rate cut delivered by the Fed. Developed equity markets’ performance (+3.4% in local currency) was negatively impacted by currency translation, with the USD strengthening considerably during the month. In local currency terms, European equities were up 2.6% and Japanese equities up 7.8%. The gains in emerging markets were primarily driven by strength in Korea (+22.7%) and Taiwan equities (+9.8%), which benefited from a narrow subset of semiconductor stocks’ strong performance.
Globally, growth stocks (+4.2%) significantly outperformed value stocks (flat). Sector performance was mixed with the technology (+7.3%) and utilities (+3.0%) sectors performing best while materials (-1.9%) and financial sectors (-1.4%) performed worst.
Fixed Income : The US Aggregate Bond Index was up 0.6%, with performance driven by coupon income and modest price appreciation from bond yields that declined 5bps to 15bps across various maturities. US government bonds were up 0.6%, with performance driven by coupon yield and price appreciation. Investment-grade corporate bonds appreciated by 0.4% with performance benefiting from declining base rates and modest spread compression. High-yield bonds and leveraged loans were both up 0.2%, with positive performance from high coupon rates offset by widening credit spreads.
Alternatives: The HFRX Global Hedge Fund Index was up 0.7%, with all major strategies delivering positive performance. Convertible arbitrage (+1.7%) and global macro / trend following (+1.4%) strategies performed best.
Manager Comments:
Alphadyne: +2.8%: Outperformance vs. HFRX index driven by positive performance across both directional and relative value interest rate bets.
Eminence: -1.8%: Underperformance vs. ACWI index (+2.2%) driven by markdowns in certain consumer discretionary sector holdings following earnings reports.
Linden: +4.0%: Outperformance vs. HFRX index (+0.7%) driven by generally strong performance by convertible arbitrage strategies as well as idiosyncratic benefits from volatility capture coupled with new issuance events.
USD October Market Commentary
Noteworthy Developments: Global equities, as represented by the MSCI ACWI Index, appreciated 2.2%, with positive performance across all major regions.
Global Equities: Global equities increased by 2.2%, with US large-cap equities (S&P 500) up 2.4%, international developed equities up 1.2% and emerging market equities gaining 4.2%.
The strong performance of the S&P 500 was driven by ongoing positive AI sentiment, better-than-expected corporate earnings, and an additional interest rate cut delivered by the Fed. Developed equity markets’ performance (+3.4% in local currency) was negatively impacted by currency translation, with the USD strengthening considerably during the month. In local currency terms, European equities were up 2.6% and Japanese equities up 7.8%. The gains in emerging markets were primarily driven by strength in Korea (+22.7%) and Taiwan equities (+9.8%), which benefited from a narrow subset of semiconductor stocks’ strong performance.
Globally, growth stocks (+4.2%) significantly outperformed value stocks (flat). Sector performance was mixed with the technology (+7.3%) and utilities (+3.0%) sectors performing best while materials (-1.9%) and financial sectors (-1.4%) performed worst.
Fixed Income : The US Aggregate Bond Index was up 0.6%, with performance driven by coupon income and modest price appreciation from bond yields that declined 5bps to 15bps across various maturities. US government bonds were up 0.6%, with performance driven by coupon yield and price appreciation. Investment-grade corporate bonds appreciated by 0.4% with performance benefiting from declining base rates and modest spread compression. High-yield bonds and leveraged loans were both up 0.2%, with positive performance from high coupon rates offset by widening credit spreads.
Alternatives: The HFRX Global Hedge Fund Index was up 0.7%, with all major strategies delivering positive performance. Convertible arbitrage (+1.7%) and global macro / trend following (+1.4%) strategies performed best.
Manager Comments:
Alphadyne: +2.8%: Outperformance vs. HFRX index driven by positive performance across both directional and relative value interest rate bets.
Eminence: -1.8%: Underperformance vs. ACWI index (+2.2%) driven by markdowns in certain consumer discretionary sector holdings following earnings reports.
Linden: +4.0%: Outperformance vs. HFRX index (+0.7%) driven by generally strong performance by convertible arbitrage strategies as well as idiosyncratic benefits from volatility capture coupled with new issuance events.
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