October 2023 Update
F&A Monthly Update | OCTOBER 2023
We hope this message finds you in good spirits. As part of our ongoing commitment to keeping you in the loop, it's time for our monthly update!
These updates provide a quick glimpse into market insights from PortfolioMetrix, giving you an overview of where your investments are headed.
Here's your October 2023 update!
Sending love
Richard and the F&A team
October 2023 Update
This month's piece is compiled by Brendan de Jongh, SA Head of Research - PortfolioMetrix.
GLOBAL UPDATE
It’s been a turbulent time in markets over the last few weeks, with both bonds and equities falling in October. At the beginning of the month, Hamas militants launched a surprise attack on Israel which drew out a strong response from Israeli defense forces. The Israeli Prime Minister, Benjamin Netanyahu, referred to the attack as an act of war. This had an impact on financial markets as uncertainty rose, bringing about volatility as well as a temporary rise in oil prices around concerns the conflict could widen to larger oil exporting nations. Elsewhere, in a similar fashion to September, broadly stronger economic news in the US translated into weaker financial market performance globally. The strong growth and employment data releases reinforced market participants’ view of interest rates being higher for longer. This caused bond yields to rise slightly (and hence bond prices to fall) as well as depressing equity markets.
LOCAL UPDATE
Local investment returns continued to underperform amid a challenging macroeconomic landscape characterized by elevated interest rates. Notably, in the latter part of the month, local bond yields and the domestic currency exhibited resilience, thereby bolstering local bond returns while exerting a dampening effect on global asset class returns. Local equities faced a challenging month, mirroring the broader trend of weakening global equity markets. Furthermore, global property performed the worst, primarily attributable to the appreciation of the South African rand and a decline in hard currency asset prices.