Hello! I trust everyone had a Happy Halloween. I also hope that you remembered to turn back your clocks.
Attached are the monthly index returns for October 2020.
- Based on client feedback/request, we are now including 15 and 20 year annualized returns, in addition to all the time periods previously shown.
- As a reminder, this report shows many/most of what we would consider commonly used benchmarks. However, the choice of benchmark in certain asset classes can make a difference over shorter time periods, even if there is less of a difference over longer time periods. For example, the Russell 2000 (shown in the attached) has a YTD return of -6.8% while the S&P 600 (not shown) has a YTD return of -13.1%, a significant difference of over 6% in what is essentially the same asset class. Over the 20 year time period, the S&P 600 actually outperforms the Russell 2000 by a little over 1% per year.
- Equity benchmarks were mixed for the month.
- The Russell 2000 Value gained 3.6% for the month, the highest returning benchmark.
- US Small Cap (core, growth, value), emerging and frontier markets were the only benchmarks with positive returns. All else were negative.
- Equity markets generally declined over the last week or so of the month as coronavirus cases continue to mount globally, with the risk of increased restrictions or lockdowns. In the US, the lack of a new fiscal stimulus plan before the election also likely weighed on results.
- Fixed income benchmarks were mostly down for the month with high yield, short term corporate and non-US (hedged USD) FI earning positive returns.
- Intermediate and Long term Treasury yields rose for the month, with 10 and 30 yr yields increasing by 20 bps each. Most economists expect the Fed to to keep short term interest rates near zero for an extended period of time.
As always, if you have any questions, please feel free to contact firstname.lastname@example.org
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.