March 2024 Index Returns

In stocks (equities):

International small cap value (5.1%), US Large cap value (5.0%), ex-US REITS (4.4%), and US small cap value (4.4%) led the way in March.
US large cap growth (1.8%) actually had the lowest monthly equity index return in March, though it still leads the way on a YTD and last 1 yr basis.
The MSCI ACWI (considered a broad benchmark for global equities) has a YTD return of 8.2%. This is important as that level of return is closer to what clients should expect on an annual basis, not a 3 month basis.
On a YTD basis, the R3000 has gained 10%. At the same time, the MSCI World ex-US NR in local currency grew by a very similar 9.6% over the same time period, highlighting the strength of returns outside the US. However (and unfortunately), because the US Dollar has strengthened over the last 3 months relative to other currencies broadly, the MSCI World ex-US NR in USD only gained 5.6%, a 400 bps difference.
Our goal of this monthly piece is to highlight benchmark returns. Every now and then, we also want to highlight some mutual funds/ETFs that differ from their indexes. This month we are highlighting the US Small Cap Value and International Small Cap Value funds/ETFs from DFA and Avantis as they have had much stronger returns vs. their category indexes over the last 3 and 12 month periods. The main reason for this outperformance has been due to the profitability factor.

In fixed income (bonds):

All returns were positive for the month with the exception of all the muni benchmarks, which all fell -0.1%.
With the exception of 5-10 yr Treasuries (-0.3%) and 10+ Yr Treasuries (-5.8%), all other fixed income indexes have positive returns over the last 1 yr.
Other than high yield (which has equity like characteristics), the next best performing fixed income category over the last 1 yr has been global ex-US bonds (hedged USD), which are up by a healthy 5.9%.

***NEW "Value Added" SECTION***

Starting this month, we are adding a new section to this monthly piece. In this new section, we will highlight a number of items including research East Bay has done internally or with our strategic partners, activities we have completed on behalf of East Bay clients, or interesting conversation we have had with you and wanted to share. If you want to learn more about any of these activities or have any questions, please just ask Mario or myself.

Indexing’s influence on stock prices – with the continued rise of indexing and with the concentration in today's US large cap equity market, Mario and I have been looking into possible long term effects rise of passive products and if/how they may actually be influencing stock prices, and possibly reducing market efficiency. No outcomes at this time. (See attached Economist article to read more if interested).
We connected an East Bay client with other advisors (non-East Bay clients) for cross-border questions.
Deep dives into factor investing beyond size and style - is their validity to other factors, and if so, how do they pair with size and style.
Earlier in March we posted a piece on Preferred Stocks.
Introduced clients to other firms supporting RIAs including 3rd party trading firms and outsourced IT services.
Presented at an end client’s investment committee meeting (it’s a non profit investments-only relationship).
Developed 401k model allocations for an end-client.
Helped craft responses and plans of action for end-client questions about holding DJT, a new publicly traded stock.

As always, please let us know if you have any questions by emailing support@xyinvestmentsolutions.com.

As an additional note, please keep in mind that these reflect historical performance of the current models, not necessarily how accounts were invested in the past.