Election jitters were in full effect in October as the VIX ended the month at 38 – notably higher than the 26.4 registered at the end of previous month. Similarly, the S&P 500 Index started to trickle down from 12 October on the back of uncertainty surrounding the timing and magnitude of another US fiscal stimulus package. Nevertheless, the bond market was likely preparing itself for expansionary fiscal policy as a steepening in the US bond yield curve, particularly in the long end, became apparent during the course of the month.
A spike in COVID-19 cases were evident in Europe without much success on any real vaccine to allay fears of renewed lockdown measures. This corresponds with the downturn in the Euro Stoxx Index from mid-month. On a more upbeat note, China GDP growth accelerated at a faster 4.9% year-on-year in third quarter compared to a rise of 3.2% in the previous quarter. This was led by a stark acceleration in construction activity +8.1% year on year, as well as an 18.1% surge in the Information Transmission, Software and Information Technology Services sector. Accordingly, strong high frequency data from emerging markets, in general, likely continued to fuel the gains posted in the MSCI Emerging Markets Index which climbed 2% in October.
Price data remained reflationary, as output price charges from the JPMorgan Global Composite PMI accelerated at a faster 51.8 index points in September compared to a reading of 51.5 in the previous month. Energy, however, is one such commodity which hasn’t registered meaningful traction amid fears of oversupply from liquid fuels globally. In fact, the MSCI World Energy Index lost 5.8% in October.
 All performance metrics are stated in I Class terms.
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