View more on these topics

Positive notes

Global equity markets shrugged off some poor corporate earnings’ news and mixed economic data to post a positive performance in October, as risk aversion stemming from the recent credit crisis ebbed.

The MSCI AC Worldindex rose by 3.81 per cents. In the bond markets, the Lehman Global Aggregate index delivered a 1.63 per cent return, led by the hitherto beleaguered areas of emerging-market debt and corporate bonds amid a return of risk appetite. However, investors continued to avoid below-investment-grade securities and asset-backed securities in general.

Investor sentiment was underpinned by hopes for another cut in US interest rates and the Fed delivered a 0.25 per cent. The VIX index of S&P 500 volatility continued to move down from peak levels set in July and August but remained more than 50 per cent up from where it started the year.

The MSCI AC World Growth index continued to outpace its MSCI AC World Value counterpart while sector performance was a mixed bag. The energy sector rose along with crude oil prices.

The MSCI Emerging Markets index rose by an impressive 11.15 per cent in anticipation of a US rate cut. With the exception of just one country, Hungary, all the emerging markets gained ground and a significant proportion posted double-digit returns.

The UK was the top performer among the developed markets, helped by strong data, notably better than expected Q2 GDP growth and a surge in September retail sales. European and US equities tracked gains in the broader global markets. US data releases highlighted the deteriorating housing market which is in stark contrast to the rest of the economy. Japan’s Topix was again the laggard among developed equity markets.

Global bond markets saw broad-based gains. Corporate bonds outperformed government issues but the ABS sector remained gloomy amid more nasty surprises from investment banks.

The dollar lost value against all major currencies apart from the yen.

Investors have remained jittery but global equity markets have continued to benefit from strong business conditions and company profitability which have cushioned the impact of the credit crunch but the risk to overall economic growth has nevertheless shifted to the downside and markets could remain vulnerable to further setbacks in the near term. Investors can take comfort in the support from central banks by direct liquidity injections and looser monetary policy.

Mark McCarron is a senior client portfolio manager at SEI


FSA warns of crackdown on mortgage brokers

The FSA has warned that it will come down hard on mortgage brokers that flout the rules after it fined two firms and banned a third for sub-prime failings.The brokers are among the five mortgage firms that the regulator flagged up at the end of its sub-prime investigation published in July. Head of retail enforcement […]

Abbey launches new long-term fixed rates

Abbey will be launching a host of longer-term product rates from next monday.It will offer new improved three-year fixed rate products which Abbey claims are now for the price of two-year fixes at 5.72 per cent with a £999 fee.Abbey is also launching new 10-year and 15-year products, availble at five-year rates at 5.74 per […]

Neptune merges global funds

Neptune is to merge its £11m global income fund into the £548m global equity fund and will introduce an income share class on the combined Oeic.

Benefits of using a probate bare trust

Have you ever wondered what happens to someone’s investment bond on their death if it is not written in trust? When someone dies it is essential to deal with their estate, which can be made up of their home, belongings, investment bonds and anything else they may have owned. But, it is not as simple […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm