Coming into the month of October, the Asset Class Scoreboard was looking brutal, with six of the eight asset classes we track in the red on the year. We mentioned it was time for the star of the portfolio to show up the last three months of the year, and it seems like they heard us…
Seven of the eight asset classes in October recorded positive numbers in October, with Managed Futures the only asset class in the negative, down -0.86% on the month. Stocks, World Stocks, and Real Estate all recorded 6%+ returns for the month on the heels off the Fed deciding not to raise rates in 2015 (although now there’s talk of December being back in play).
But we can’t help but wonder if October’s great numbers are a little bit like the Manning brothers in action yesterday, where Eli Manning was the first QB in NFL history to throw six touchdowns, no interceptions, and still lose the game.
Image Courtesy: NFL_MEMES
Are these October returns just a few touchdown passes on the way to a losing game (the year) or are they the start of a comeback? It feels like the back and forth of that Giants/Saints game, where Eli had to score 6 touchdowns, because the other guy had 5 already. On the investment side, you have to have big returns just to make up for those poor ones a few months ago. This is what volatility looks like in real life – scoring a touchdown/giving up a touchdown, winning/losing, winning again, losing again.
October was just the start of the fourth quarter… we’ll see who has the ball last in this game and wins the year.
(Disclaimer: past performance is not necessarily indicative of future results.)
Source: All ETF performance data from Morningstar.com
Sources: Managed Futures = Newedge CTA Index, Cash = 13 week T-Bill rate,
Bonds = Vanguard Total Bond Market ETF (BND),
Hedge Funds= IQ Hedge Multi-Strategy (QAI)
Commodities = iShares GSCI ETF (GSG);
Real Estate = iShares DJ Real Estate ETF (IYR);
World Stocks = iShares MSCI ACWI ex US Index Fund ETF (ACWX);
US Stocks = SPDR S&P 500 ETF (SPY)
The performance data displayed herein is compiled from various sources, including BarclayHedge, RCM's own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.
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