A brief review of markets performance and the key performance contributors to the Darling Macro Fund
October: Markets performance
Risk returned as most equity markets fell.
Australian equities rose by 1.5% while US equities fell -2.6% and European equities fell -7.3%. Plausible explanations for Australia’s outperformance include announcements of further Australian fiscal and monetary support, the weaker A$, clear outperformance on virus control and lower equity market sensitivity to rising bond yields.
Unusually, despite the falls in most equities, defensive assets, such as US 10 year government bonds -0.9% also fell, seemingly reacting to a steady supply of stronger than expected US economic data. US yields have now risen well above lows established in March. Gold -0.8%, also fell while equity volatility rose.
Agricultural commodities rose as China demand strengthened and the US$ fell.
Markets and the Darling Macro Fund are plotted in order of their returns year to date.
Year to date : Markets performance
Precious metals, sovereign bonds and technology related equity markets have been the best performing markets during 2020.
Some equity markets such as Taiwan and S&P500 have recovered strongly while many remain down by more than 20%.
Markets and the Darling Macro Fund are plotted in order of their returns year to date.
Year to date : Contributions to Darling Macro Fund
Positive contributions from bonds and precious metals offset to a lesser degree by equities
The fund generated strong returns from :
- Large allocations to defensive assets such as UST 10Y (US 10 year government bonds), Bunds (German government bonds) and Gold, while
- Avoiding some of the large under performers such as WTI Crude (Oil) and European equity markets.
Markets and the Darling Macro Fund are plotted in order of their returns year to date.
Source: Darling Macro. Performance for each market is determined by the performance of the futures contracts referencing each market. For wholesale investors only.