Quarterly Market Review - Q3 2023

Welcome to RPAG Quarterly Market Review for Q3 2023 where we discuss U.S. equity markets, international equities, broad U.S fixed income market, and much more.

• Jeff Elvander, Chief Investment Officer

Summary

Equity and Fixed Income markets were both negative for the quarter, as long-term rates rose to levels not seen in over 15 years (as measured by the 10 Yr. Treasury). The rise in rates over the quarter negatively impacted the fixed income market, which was down 3.2%, bringing year-to-date returns negative, down 1.2% (Bloomberg Barclays Aggregate). International equities continued to underperform their U.S. equity counterparts. Small Cap Value was the best performing U.S. equity asset class, down 3.0% (Russell 2000 Value), outperforming Small Cap Growth which was the worst, down 7.3% (Russell 2000 Growth). Unemployment increased to 3.8% over the quarter, but the U.S. labor market continued to remain tight overall. The Federal Reserve raised rates 25 basis points over the quarter, indicating that rates would likely be higher for longer given the current inflationary outlook. 

Quarterly and year-to-date returns of the following indices: U.S. Equity (Russell 3000 Index), Fixed Income (Bloomberg Barclays U.S. Aggregate Bond Index) and International Equity (MSCI ACWI ex U.S. Index)

U.S. Equity

• The broad U.S. equity market, as measured by the Russell 3000 Index, was down 3.3% for the quarter.
• The best performing U.S. equity index for the quarter was Russell 2000 Value, returning a negative 3%.
• The worst performing U.S. equity index for the quarter was Russell 2000 Growth, returning a negative 7.3%.
  
  

Over the last year, growth stocks outperformed value stocks by 13.30%. For the trailing quarter, growth stocks outperformed value stocks by 0.10%.

The graph above is plotted using a rolling one-year time period. Growth stock performance is represented by the Russell 1000 Growth Index. Value stock performance is represented by the Russell 1000 Value Index.

International Equity

• Developed international equity returned a negative 4% in the last quarter (MSCI EAFE).
• Emerging market equity posted a negative 2.9% return (MSCI Emerging Markets Index).

Over the last year, developed international stocks outperformed emerging market stocks by 14.60%. For the trailing quarter, emerging market stocks outperformed developed international stocks by 1.10%.

Fixed Income

• The broad U.S. fixed income market returned a negative 3.2% (Bloomberg Barclays U.S. Aggregate) for the quarter.
• The best performing sector for the quarter was Cash, returning a positive 1.3%. 
• The worst performing sector for the quarter was Mortgage Backed Securities, returning a negative 4.1%.
  
  

Download a copy of this market review document by clicking here, or contact us at the email address below.

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