MARKET REPORT: January 2017

Developed MarketsCommentary International Developed Markets Start Year Strong– For the month of January, developed market index returns were uniformly positive and healthy. The Pacific ex-Japan region and Canada had the highest returns of 5.68% and 3.72%, respectively. The UK and the United States trailed the broader developed market indexes.

 

Emerging MarketsCommentary Emerging Markets Outpace Developed Markets in January– Emerging markets in the aggregate and individually posted strong gains for the month, outpacing developed markets. Brazil and Korea had the highest returns of 10.74% and 8.64%, respectively. Russia was slightly in the red, recording a -0.27% return.

 

Global SectorCommentary Energy Sector Takes a Step Back– Materials and information technology posted the strongest global sector returns of 7.38% and 4.86%, respectively. Energy gave back some of its gains from 2016.

 

Domestic Equity FactorsCommentary U.S. Growth Companies Off to Strong Start In January, domestic growth indices outperformed their value counterparts across the size spectrum. Large cap growth performed the best among the different styles. Momentum recorded a 1.76% return.

 

Foreign Equity FactorsCommentary Momentum Posts a Solid Return – In the international developed markets, value indices outperformed growth indices in the small cap space, but underperformed among the large cap companies. Momentum posted a strong return of 3.98%.

 

Liquidity ProvidersCommentary Yields Still Historically Low– Money market funds continue to have very low yields, performing in line with the 3 month T-Bill Index. The yields failed to keep pace with changes in the Consumer Price Index.

 

Disinflationary / Deflationary Hedges

Commentary High Yield and Emerging Market Bonds Continue Run into 2017– The returns of deflationary hedges were mostly positive across the board in January. High yield and emerging market bonds recorded the highest returns, echoing returns in the equity markets. Government bonds recovered some of their losses from late last year.

 

Inflation-Sensitive InvestmentsCommentary Gold Shines in January– Inflation-sensitive investment returns were mixed for the month. Gold and MLPs performed well, returning 5.84% and 4.89%, respectively. Natural gas and oil took a step back.

 

World CurrenciesCommentary The U.S. Dollar Continues its Rise– The U.S. dollar continued to appreciate against most other currencies over the past three months. The Japanese Yen, Mexican Peso, and Euro depreciated the most versus the USD over the past three months. The British Pound, Canadian Dollar, and Israeli Shekel strengthened versus the U.S. dollar.

 

 

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