Investment Directors’ Bulletin (November 2015)Contributors Edmund Brandt, Edward Walker
Edmund Brandt and Ed Walker write in their capacity as investment directors. Their asset allocation views are based on a 12-month time horizon and reflect the input from various investment teams within J.P. Morgan Asset Management. The discussions are considered with Edmund and Ed ultimately producing their views on the regions in terms of underweight, neutral or overweight.
Equity markets rebound strongly in October
October witnessed a sharp reversal in fortunes for global equities. The MSCI World Index increased 7.9% in local currency terms. There was little differentiation between major developed markets, with the rebound led by cyclical sectors, such as technology and energy. Emerging markets, in local currency terms, rose 5.4%, but given a rebound in most emerging market currencies when measured in US dollars, this produced a near identical 7.8% dollar return for the MSCI Emerging Markets Index.
Monthly equity returns in October were among the strongest in four years, and the turnaround in global equities from the low on 29 September for the next six trading sessions was the largest reversal since the aftermath of Lehman Brothers, as reported by the Financial Times. It was following this rebound that we downgraded our view on US and Japanese equities. However, equity markets continued to rally, albeit at a more moderated pace for the rest of the month.
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