Asset Allocation Outlook October
Equity markets had a tough time of it in September. Less growth, more inflation, central banks moving towards tapering their highly-expansionary monetary policies and pushing up bond yields in the process, as well as concerns about the Chinese economy, caused many markets to close the month in the red. After noting a loss in January, it was only the second monthly loss for the MSCI global equity index so far this year. The global equity index was down by 4.2% (in US dollars), with little difference between industrialised countries and emerging markets. Europe (-3.5% in euros) held up slightly better than the US (-4.8% in US dollars). Japan was the notable exception at a plus of 3.5% (in yen); markets anticipate a more expansionary fiscal policy there under a new government.