As we enter March, springtime is just around the corner!
All eyes are going to be on the FOMC for their next meeting on March 15-16. With the last 12 month CPI reading hitting 7.5%, inflation is clearly on everyone's mind. The Fed already had a task that was difficult enough, and the was before the recent geopolitical events. Clearly there are still many unknowns as to how the events in Ukraine will unfold for them, Russia and elsewhere, and it is certainly possible these events may cause inflation to grow even higher.
In equities:
- The MSCI ACWI fell by -2.6% for the month. Interestingly, the benchmark was down -4.3% between Feb 1 and Feb 23. Russia invaded Ukraine on Feb 24 and the MSCI ACWI was actually up 1.8% from Feb 24 through Feb 28.
- Domestic small caps (growth, value, and blend) were all positive for February. In fact, these were the only equity indexes with a positive return for the month. Small cap value led the way returning 1.7%.
- In US equities, value has outperformed growth in both large and small cap over the last 1 month, 3 months, YTD and last 1 year. Small cap value has outperformed small cap growth over the last 3 years too.
- Large cap non-US equities have beaten their US counterparts over the last 1 month and 3 months.
- US REITs (25.3%) and Global REITs (18.4%) have the highest equity returns over the last 1 year.
In fixed income:
- The ICE BofA 5-10 Yr US Treasury Index declined by -0.4% for the month. It had fallen -1.4% between Feb 1 and Feb 23 but gained 1.0% over the remainder of the month. Correspondingly, 10 Year Treasury rates ended January at 1.79%, rose to 1.99% at the end of day Feb 23 but declined again to 1.83% to end the month.
- ST TIPS was the only non-cash FI benchmark with a positive return in February, gaining 1.2%. It has, by far (5.4%) the highest FI return over the last year as most other FI indexes are negative for the same time period.
- For the month, munis outperformed both Treasuries and Corporates over the 1-5, 5-10 and 10+ year buckets shown.
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.