Market Monitor – September 2017

October 5th, 2017, by Georgina Ogilvie-Jones

We are now three quarters of the way through 2017 and it is interesting to review the performance of different asset classes in the year to date. The total return of the equity indices we track are all in positive territory for Sterling based investors, with the FTSE World index up 7.98%. Breaking down regional performance, the FTSE World Europe ex UK index has led the way, gaining 17.07%. The comparatively high octane FTSE World Asia Pacific ex Japan and FTSE Emerging indices follow with gains of 12.46% and 14.08% respectively. The final grouping concerns the UK, Japan and USA, all of which have produced positive, but single digit, returns. The FTSE 100 has a total return of 6.59%, the FTSE Japan 6.02% and the S&P 500 4.74%.

Gilt yields have increased, and in consequence, prices have fallen in the year to date. The total return of the FTSE Actuaries UK Conventional Gilts All Stocks index has been flat in the year to date and has lost 3.56% in the last year. The 10-year benchmark yield increased from 1.1% to 1.3% in September and Moodys downgraded UK government debt based on Brexit concerns. The index lost 2.58% over the month.

Downward trends commenced in 2011 for gold and in 2014 for oil. This torrid period can be clearly seen in the 5-year cumulative total return data with the S&P GSCI Gold Spot index losing 15.4% and the S&P GSCI Brent Crude Spot index down 54.8%. 2017 has seen the typical month to month undulations in their prices because commodities are a volatile asset class. In the year to date the S&P GSCI Brent Crude Spot index has lost 11.25%, whilst the S&P GSCI Gold Spot index has gained 1.96%.

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