Imperium Capital Publication

Viewpoint – November 2018

Once again, the month of October delivered a torrid time for investors, leaving the goldilocks environment of 2017 dead and buried. In a sharp reversal of fortunes, which began at the end of September, very few asset classes produced a positive return in October. The classic safe-haven assets including government bonds, gold and the Japanese Yen produced positive returns, with the notable exception of US Treasuries posting a negative return of 0.5%. The equity market suffered the brunt of the selling, led by the Asian equity market falling over 10% in the month, while most other regions fell 7-9% in US Dollar terms. Despite a bounce in the final days of the month, the MSCI World Index declined 7.3%, a slightly smaller fall than the 8.7% decline in Emerging Markets.

Viewpoint – October 2018

After the sharp falls in emerging market currencies and markets in the previous month, a degree of stability returned in September. With the US equity market up 0.5% and indexes reaching new all-time highs, investors might be forgiven for thinking all was well. The MSCI World Index was up 0.6% with all regions producing gains, with the exception of Asia ex Japan equity market, which fell 1.4%. Emerging market equities were down modestly, falling 0.5%, dragged down by the poor performing Asian market. Emerging market currencies recovered by 1.6% in aggregate following the significant falls in August and emerging market bonds produced strong returns of 2.8%. However the modest headline moves and low volatility in the month hid a number of worrying undercurrents.