September 2021 Update
F&A Monthly Update | September 2021
Time for another monthly update! As always, we've put together a snapshot of market insights from PortfolioMetrix to bring you an overview of where your investments are headed. Here's your September 2021 update!
September 2021 Update
This month's piece is compiled by Brendan de Jongh, SA Head of Research - PortfolioMetrix.
LOCAL UPDATE
September saw the spillover of global risks into South African asset classes with local bonds selling off and the rand weakening over the month. SA bonds showed their riskiness underperforming local equities as foreign investors shunned the fixed income market. Despite a weakening rand, global property was the worst performing asset class and global bonds was the best performing asset class in rands. Diving deeper into the local equity market, resources significantly underperformed, falling 9% for the month with the financials sector up 2%. Small caps continued to outperform despite the riskier environment.
Global Update
September was an interesting month for markets, which initially took fright at wobbles within the large and systemically important Chinese real estate sector. US and UK monetary policy makers then hinted that rates would rise faster than expected and, in the case of the US Federal Reserve, flagged a future announcement of a slowdown in its bond buying. The result was a marked increase in global bond yields, which also negatively impacted the more growth/quality type stocks (which make up the majority of equity indices). The equity sell-off was near universal this month, although Japan was a bright spot as political change and vaccine progress boosted prospects for its economy.