Prepared by Brandon Yee and Tom Connelly
Foreign Developed Markets have a Strong March– In the month of March, the broader developed markets posted a gain of 2.54%. Europe ex UK and Pacific ex Japan recorded the highest returns of 4.97% and 2.58%, respectively. The U.S. market was flat.
Emerging Markets Continue to Advance – Emerging markets posted a gain of 1.98% for the month. Mexico and Korea had the highest returns of 9.8% and 8.17%, respectively. The Brazilian equity market dropped 4.5%.
Infrastructure and IT Post Strong Gains– Infrastructure and information technology recorded the strongest global sector returns of 3.41% and 3.23%, respectively. The materials and financial sectors have performed well over the past year.
Domestic Equity Factors
U.S. Growth Companies Continue Strong Start – In March, domestic growth indices outperformed their value counterparts. Over the past year, value has outperformed growth. Momentum recorded a 0.48% return.
Foreign Equity Factors
Emerging Mid and Small Cap Companies Edged Up in March – In the international developed markets, growth indices outperformed value indices. Smaller companies in the emerging markets performed well in March, posting a return of 2.73%.
Inflation Steadily Increases– 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
Emerging Market Bonds Build on Strong Recent Performance – The returns of deflationary hedges were mixed for the month. Emerging market bonds and long-term municipals recorded strong returns of 0.35% and 0.34%, respectively. Long-term government and high yield dropped the most in March.
Inflation-Sensitive Investments Slip in March– Inflation-sensitive investments recorded mostly negative returns in March. Natural gas and infrastructure posted gains of 11.22% and 3.41%, respectively. Crude oil lost 6.98%.
The U.S. Dollar Loses Ground– The U.S. dollar depreciated against most other currencies over the past three months. The Mexican Peso and Israeli Shekel appreciated the most versus the U.S. dollar in March.