Despite brief volatility in August, the MSCI All Country World IMI Index returned 6.8% for the third quarter, marking the index’s fourth consecutive quarter of positive returns. Non-US stocks led for the period, with countries like China, India, and Japan each exceeding US returns. (1) Equity and fixed-income markets contemplated rate cuts at central banks, and the US, European Union, and UK each lowered policy rates during the quarter.
As Q3 closes and Q4 begins, many market indices are at or close to record levels. (2) The performance of the Magnificent 7 (3) was divided this quarter as Apple, Tesla, and Meta were all top contributors to global returns, while Alphabet, Microsoft, Amazon, and NVIDIA were all among the top detractors. However, the US wasn’t the only country to make headlines, as China announced a stimulus package in late September, which helped propel emerging markets to be the best-performing market. At the sector level, financials joined REITs and utilities as the top-performing sectors, while Information Technology was dragged to the bottom by names such as Microsoft, ASML, and Samsung.
Globally, small caps outperformed large caps for the period, and higher-profitability stocks underperformed lower-profitability stocks. REITs and utilities were the quarter’s best-performing sectors, while energy and information technology were the worst. Value stocks generally outperformed growth globally, but deeper-value, higher-profitability stocks lagged.
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1. Non-US stocks refers to developed ex US and emerging markets stocks. Country returns are the country component indices of the MSCI All Country World IMI Index for all countries except the United States, where the Russell 3000 Index is used instead. MSCI index returns are net dividend. 2. Connor Smith, “S&P 500 and Dow Rally to New Highs,” Barron’s, September 19, 2024. 3. The Magnificent 7 stocks include Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla. Past performance is no guarantee of future results. Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission. Diversification does not eliminate the risk of market loss. Risks include loss of principal and fluctuating value. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than original cost. Premium refers to a return difference between two assets or portfolios. Market segment (index representation) as follows: US Stock Market (Russell 3000 Index), Developed ex US Stocks (MSCI World ex USA IMI Index [net div.]), Emerging Markets (MSCI Emerging Markets IMI Index [net div.]), US Bond Market (Bloomberg US Aggregate Bond Index), and Global Bond Market ex US (Bloomberg Global Aggregate ex-USD Bond Index [hedged to USD]), Global Stock Market (MSCI All Country World IMI Index [net div.]). Sector returns are derived by Dimensional using constituent data from the MSCI All Country World IMI Index. Returns for specific securities are sourced from the MSCI All Country World IMI Index using daily security returns. Securities without a GICS sector are excluded. Sectors are classified according to GICS Industry code. GICS was developed by and is the exclusive property of MSCI and S&P Dow Jones Indices LLC, a division of S&P Global. S&P data © 2024 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. MSCI data © MSCI 2024, all rights reserved. Bloomberg data provided by Bloomberg. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. References to specific company securities should not be construed as a recommendation or investment advice. Global Premium Returns are computed from MSCI All Country World IMI Index published security weights and Dimensional computed security returns and Dimensional classification of securities based on size, value, and profitability parameters. Within the US, Large Cap is defined as approximately the largest 90% of market capitalization in each country or region; Small Cap is approximately the smallest 10%. Within the non-US developed markets, Large Cap is defined as approximately the largest 87.5% of market capitalization in each country or region; Small Cap is approximately the smallest 12.5%. Within emerging markets, Large Cap is defined as approximately the largest 85% of market capitalization in each country or region; Small Cap is approximately the smallest 15%. Designations between value and growth are based on price-to-book ratios. Value is defined as the 50% of market cap with the lowest price-to-book ratios by size category and growth is the highest 50%. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. High profitability is defined as the 50% of market cap with the highest profitability by size category and low profitability is the lowest 50%. REITs and utilities, identified by GICS code, and stocks without size, relative price, or profitability metrics are excluded from this analysis. Countries not in the Dimensional investable universe are excluded from the analysis. Their performance does not reflect the expenses associated with the management of an actual portfolio. This information is intended for educational purposes and should not be considered a recommendation to buy or sell a particular security. Named securities may be held in accounts managed by Dimensional.
This content is developed from sources believed to be providing accurate information, and provided by Life Strategy Partners. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
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