Noteworthy Developments: Global equities, as represented by the MSCI ACWI Index, appreciated +3.6%, with positive performance across all major regions.
Global Equities: Global equities increased by 3.6%, with US large-cap equities (S&P 500) up 3.6%, international developed equities up 1.9%, and emerging market equities gaining 7.2%.
The strong performance of the S&P 500 was driven by ongoing positive AI sentiment and positive sentiment surrounding Fed rate cuts. The Magnificent Seven outperformed again and were up 8.5%. The outsized gains in emerging markets were primarily driven by strength in China, Taiwan, and Korean equities (+9.5% to +10.5%), which benefitted significantly from technology stocks with significant cloud and semiconductor exposure associated with AI.
Globally, growth stocks (+4.9%) outpaced value stocks (+2.3%) once again. Almost all sectors delivered positive performance. Technology and communications services sectors (+7.8% and +5.3%) performed best, while consumer staples and energy (-1.8% and flat) performed worst.
Fixed Income : TThe Barclays US Aggregate Index was up 1.1% with US Treasuries up 0.9% and corporate IG bonds up 1.5%. Safe fixed income benefitted from coupon income and price appreciation resulting from declines in bond yields of 15bps to 25bps across the curve. Corporate IG bonds also benefitted from spread tightening. High yield bonds appreciated 0.8% with performance benefiting from the factors discussed above. Leverage loans were up 0.5% as high coupon income was modestly offset by widening spreads.
Alternatives: The HFRX Global Hedge Fund Index was up 1.5%, with all major strategies delivering positive performance. Global macro / trend following (+3.4%) and convertible arbitrage (+2.7%) strategies performed best.
Manager Comments:
Carrhae: +10.1%: Outperformed the EM Index (+7.2%) with performance driven by exposure to idiosyncratic positions with exposure to AI and gold mining.
Starboard: -1.3%: Underperformed HFRX Index (+1.5%) and Russell 2000 Index (+3.3%) due to general weakness in certain catalyst-oriented names (catalysts yet to play out) and sharp declines in Kenvue position due to negative headlines regarding Tylenol and linkage to potential autism.
USD September Market Commentary
Noteworthy Developments: Global equities, as represented by the MSCI ACWI Index, appreciated +3.6%, with positive performance across all major regions.
Global Equities: Global equities increased by 3.6%, with US large-cap equities (S&P 500) up 3.6%, international developed equities up 1.9%, and emerging market equities gaining 7.2%.
The strong performance of the S&P 500 was driven by ongoing positive AI sentiment and positive sentiment surrounding Fed rate cuts. The Magnificent Seven outperformed again and were up 8.5%. The outsized gains in emerging markets were primarily driven by strength in China, Taiwan, and Korean equities (+9.5% to +10.5%), which benefitted significantly from technology stocks with significant cloud and semiconductor exposure associated with AI.
Globally, growth stocks (+4.9%) outpaced value stocks (+2.3%) once again. Almost all sectors delivered positive performance. Technology and communications services sectors (+7.8% and +5.3%) performed best, while consumer staples and energy (-1.8% and flat) performed worst.
Fixed Income : TThe Barclays US Aggregate Index was up 1.1% with US Treasuries up 0.9% and corporate IG bonds up 1.5%. Safe fixed income benefitted from coupon income and price appreciation resulting from declines in bond yields of 15bps to 25bps across the curve. Corporate IG bonds also benefitted from spread tightening. High yield bonds appreciated 0.8% with performance benefiting from the factors discussed above. Leverage loans were up 0.5% as high coupon income was modestly offset by widening spreads.
Alternatives: The HFRX Global Hedge Fund Index was up 1.5%, with all major strategies delivering positive performance. Global macro / trend following (+3.4%) and convertible arbitrage (+2.7%) strategies performed best.
Manager Comments:
Carrhae: +10.1%: Outperformed the EM Index (+7.2%) with performance driven by exposure to idiosyncratic positions with exposure to AI and gold mining.
Starboard: -1.3%: Underperformed HFRX Index (+1.5%) and Russell 2000 Index (+3.3%) due to general weakness in certain catalyst-oriented names (catalysts yet to play out) and sharp declines in Kenvue position due to negative headlines regarding Tylenol and linkage to potential autism.
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