first quarter market report

8/18/2019 First Quarter Market Report

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Q1Quarterly Market ReviewFirst Quarter 2016

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Quarterly Market ReviewFirst Quarter 2016

Overview:

Market Summary

Worl Sto!k Market "er#orman!e

Worl $sset %lasses

&S Sto!ks

International 'evelo(e Sto!ks

)merging Markets Sto!ks

Sele!t %ountry "er#orman!e

Real )state Investment *rusts +R)I*s,

%ommoitiesFi-e In!ome

.lo/al 'iversi#i!ation

Quarterly *o(i!: Free *rows

*is re(ort #eatures worl !a(ital market (er#orman!e

an a timeline o# events #or te (ast uarter It /egins

wit a glo/al overview3 ten #eatures te returns o#

sto!k an /on asset !lasses in te &S an

international markets

*e re(ort also illustrates te (er#orman!e o# glo/ally

iversi#ie (ort#olios an #eatures a uarterly to(i!


3/16

Market Summary

4

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.

Market segment (index representation) as foll ows: US Stock Market (Russell 3000 Index), International e!eloped Stocks (MS"I #orld ex US$ Index %net di!&'), merging Markets (MS"I merging Markets Index %net di!&'),lo*al Real state (S+ lo*al RI- Index), US .ond Market (.arcla/s US $ggregate .ond Index), and lo*al .ond ex US Market ("itigroup #.I ex US$ 130 2ears %edged to US')& -4e S+ data are pro!ided */

Standard + oor5s Index Ser!ices roup& Russell data 6 Russell In!estment roup 77890;, all rig4ts reser!ed& MS"I data 6 MS"I 0;, all rig4ts reser!ed& .arcla/s data pro!ided */ .arcla/s .ank


4/16


5rap4 Source: MS"I $"#I Index& MS"I data 6 MS"I 0;, all rig4ts reser!ed&

It is not possi*le to in!est directl/ in an index& erformance does not reflect t4e expenses associated wit4 management of an actual portfolio&Past performance is not a guarantee of future results&

MS%I $ll %ountry Worl Ine- wit sele!te ealines #rom Q1 2016

*ese ealines are not o##ere to e-(lain market returns Instea3 tey serve as a reminer tat investors soul view aily

events #rom a longterm (ers(e!tive an avoi making investment e!isions /ase solely on te news

127

157

167

187

207

227

9an Fe/ Mar

%ina Market 'ro(

Leas to Worries

o# Furter *urmoil;

'ow3 Sre-itA Fears;

&S3 %ina $gree to

San!tion ?ort Boreaon ?u!lear "rogram;

&S )!onomy

Starting 2016 on

Soli Footing;

?et Wort o# &S Couseols

Rose to Re!or D868 *rillion

in Fourt Quarter;

.lo/al %urren!ies

Soar3 'e#ying

%entral >ankers;

S


5/16


7

-4ese 4eadlines are not offered to explain market returns& Instead, t4e/ ser!e as a reminder t4at in!estors s4ould !iew dail/ e!ents from a long=term perspecti!e and a!oid making in!estment decisions *ased solel/ on t4e news&

rap4 Source: MS"I $"#I Index& MS"I data 6 MS"I 0;, all rig4ts reser!ed&

It is not possi*le to in!est directl/ in an index& erformance does not reflect t4e expenses associated wit4 management of an actual portfolio&Past performance is not a guarantee of future results&

MS%I $ll %ountry Worl Ine- wit sele!te ealines #rom (ast 12 monts

520E5 0 52125 0 52174 0 52187 0 52216 0 5225F 0 522FF 0 5240F 0 52448 0 5246E 0 524E8 0 5252E 0 52560 0150

160

180

200

Long Term(2000–Q1 2016)

0000

70000

100000

170000

200000270000

Last 12

months

?asa %om(osite3

Sailout )-tension;

Iran3 Worl "owers

Rea! ?u!lear 'eal;

&S Oil

"ri!es Fall to

Si-=ear Low;

&S %onsumer

"ri!es Rise #or Si-t

Straigt Mont;

&S Se!on Quarter

.'" .rows 4E;

IMF 'owngraes

.lo/al )!onomi!

Outlook $gain;

"aris $tta!ks

Leave More tan

100 'ea;

)uro(ean Markets

to Finis 2017 among

WorlAs *o( "er#ormers;

'ow3 Sre-itA Fears;

?et Wort o# &S

Couseols Rose toRe!or D868 *rillion

in Fourt Quarter;

S


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Worl $sset %lasses

6


-4e S+ data is pro!ided */ Standard + oor5s Index Ser!ices roup& Russell data 6 Russell In!estment roup 77890;, all rig4ts reser!ed& MS"I data 6 MS"I 0;, all rig4ts reser!ed& ow >ones data (formerl/ ow

>ones #ils4ire) pro!ided */ ow >ones Indexes& .arcla/s data pro!ided */ .arcla/s .ank


7/16

10

165

147

0E

05

172

568

Ranke Returns #or te Quarter +,

&S Sto!ks

First Quarter 2016 Ine- Returns

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio &

Market segment (index representation) as follows: Marketwide (Russell 3000 Index),


8/16

International 'evelo(e Sto!ks

8


Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as foll ows:


9/16

)merging Markets Sto!ks

E


Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows:


10/16

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

44701

746

1016

28

202

2288

2088

150

17E0

1587

1576

1445

125

1276

1126

840

820

42

0E

725

554

517

000000

000

000

Ranke )merging Markets Returns +,

000

000

000

000

000

000

000

000

000

000

016

080

117

151

218

221

264

461

466

587768

87

105

1187

E2E

71

426

2E

274

12E

0

024

00E

000

000

000

000

000

000

000

000

000

000000

000

000

Ranke 'evelo(e Markets Returns +,

Sele!t %ountry "er#orman!e

10

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio &

"ountr/ performance *ased on respecti!e indices in t4e MS"I #orld ex US IMI Index (for de!eloped markets), Russell 3000 Index (for US), and MS"I merging Markets IMI Index& $ll returns in US and net of wit44olding tax

on di!idends& MS"I data 6 MS"I 0;, all rig4ts reser!ed& Russell data 6 Russell In!estment roup 77890;, all rig4ts reser!ed& U$ and @atar 4a!e *een reclassified as emerging markets */ MS"I, effecti!e Ma/ 0A&

%anaa re!ore te igest !ountry (er#orman!e in evelo(e markets3 wile Israel an Italy (oste te lowest returns #or te uarter In

emerging markets3 >raGil an "eru re!ore te igest !ountry returns3 wile %ina an .ree!e re!oring te lowest



11/16

Real )state Investment *rusts +R)I*s,

11


Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.Bum*er of RI- stocks and total !alue *ased on t4e two indices& $ll index returns are net of wit44olding tax on di!idends& -otal !alue of RI- stocks represented */ ow >ones US Select RI- Index and t4e S+ lo*al ex

US RI- Index& ow >ones US Select RI- Index used as prox/ for t4e US market, and S+ lo*al ex US RI- Index used as prox/ for t4e #orld ex US market& ow >ones US Select RI- Index data pro!ided */ ow

>ones 6& S+ lo*al ex US RI- Index data pro!ided */ Standard and oor5s Index Ser!ices roup 6 0;&

R)I*s in evelo(e markets (oste very strong

(er#orman!e #or te uarter &S R)I*s out(er#orme

/roa market &S euity ini!es

6050

*otal Jalue o# R)I* Sto!ks

860

712

Ranke Returns +,


12/16


13/16

1

448

248

444

>on =iels a!ross Issuers +,

Fi-e In!ome

14


& .arcla/s US "orporate .ond Index& & .arcla/s Municipal .ond Index& 2ield cur!e data from Cederal Reser!e& State and local *onds are from t4e .ond .u/er Index, general o*ligation, 0 /ears to maturit/, mixed Dualit/&

$$$=$$ "orporates represent t4e .ank of $merica Merrill


14/16

.rowt o# Wealt: *e Relationsi( /etween Risk an Return

Stock/Bond Mix

.lo/al 'iversi#i!ation

15


i!ersification does not eliminate t4e risk of market loss& Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect expensesassociated with the management of an actual portfolio & $sset allocations and t4e 4/pot4etical index portfolio returns are for illustrati!e purposes onl/ and do not represent actual performance& lo*al Stocks represented */

MS"I $ll "ountr/ #orld Index (gross di!&) and -reasur/ .ills represented */ US Gne=Mont4 -reasur/ .ills& lo*all/ di!ersified allocations re*alanced m ont4l/, no wit4drawals& ata 6 MS" I 0;, all rig4ts reser!ed& -reasur/

*ills 6 Stocks, .onds, .ills, and Inflation 2ear*ookE, I**otson $ssociates, "4icago (annuall/ updated work */ Roger & I**otson and Rex $& SinDuefield)&

*ese (ort#olios illustrate te (er#orman!e o# i##erent

glo/al sto!k/on mi-es an igligt te /ene#its o#

iversi#i!ation Mi-es wit larger allo!ations to sto!ks

are !onsiere riskier /ut ave iger e-(e!te

returns over time

007

022

044

048

048

Ranke Returns +,

42016

100 Sto!ks

727

7070

277

100 *reasury >ills


15/16

“What do you regard as the most difficult period in the financial markets during your 25 years in the investment business?”

I am o#ten aske tis uestion3 usually /y (eo(le wo alreay ave a #ramework an o(inion as a result o# living troug one or several market ownturns

For e-am(le3 many oler avisors an teir !lients regar te 1E4N1E5 /ear market as te tougest (erio in teir investment li#etime Mileage

investors may !onsier te te! /oom an /ust o# te late 1EE0s an early 2000s to /e te /ellweter event #or a generation o# investors wo assume tey

!oul get ri! on one great sto!k (i!k *oay3 Hust a/out everyone remem/ers te 2008N200E glo/al #inan!ial !risis3 aving e-(erien!e te an-iety o#

e!lining investment a!!ounts temselves

or knowing someone wo i

*e market e!line in early 2016 as mu! o# te same #eel as (ast events *imes like tese are never easy #or !lients or avisors3 wo must !on#ront teir!on!ern tat tings Hust migt /e i##erent tis time; Wen in te mist o# a market e!line3 it is natural to sense tat te volatility is lasting longer an is

worse tan anyting /e#ore $s a result3 avisors s(en a lot o# time talking to teir !lients in an e##ort to alleviate elevate !on!erns an #ears

Cow o we #in te wors tat migt el( minimiGe te #ear an an-iety avisorsA !lients #eel a/out teir investment (ort#olios an retirement se!urity $s you

know3 no single wor or story !an ease teir !on!ernsKan !ertainly not overnigt *e more e##e!tive !ourse may /e #or avisors to steaily lea !lients

own a (at #rom worry to !alm troug a !onversational a((roa! tat em(asiGes te im(ortan!e o# sti!king wit teir (lan

LI!I" #$%&'SS T% IS&I#LI'

I a te o((ortunity a #ew weeks ago to s(eak at an avisorAs !lient event in %ali#ornia $s I was riving to te event3 I tougt a/out ow

to make te (resentation !onversational an ensure te !on!e(ts o# (ro!ess an is!i(line resonate wit te auien!e

*e auien!e was a s(ortsoriente !row3

an I a a/out 17 minutes to get a!ross one im(ortant !on!e(t tat migt el( tem navigate te !o((y markets *en I remem/ere an arti!le I rea

a/out worl!lass atletes an teir a((roa! to su!!ess *e autor es!ri/e ow te greatest atletes3 #rom Olym(ians to allstar (ro#essionals3 #o!us on

(ro!ess rater tan out!ome wen !om(eting at te igest level I tougt a/out tis in !onte-t o# my own !ollege atleti! e-(erien!e3 wi!3 altoug not at

te Olym(i! level3 involve te same nee #or !alm an

#o!us uring ig(ressure moments in

a /asket/all game

Imagine yoursel# (laying in a !am(ionsi( /asket/all game =our team is trailing /y one (oint =ou are #oule Hust as te game !lo!k goes to Gero =ou ave

two #ree trows Make /ot an you win Miss tem an you lose

Free *rows

17$dapted from HCree -4rows, $d!isor "ommunit/ column, Marc4 0;& imensional Cund $d!isors


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first quarter market report

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