The weekly update for 9/3/2013 includes a listing of the new pieces of intellectual capital that HEK released the prior week, upcoming events, commentary on market experience over the prior week, and a discussion of economic releases during the upcoming week.
NEW PIECES OF INTELLECTUAL CAPITAL RELEASED:
Alternative Assets: The Next Frontier for Defined Contribution Plans. Alternative investments such as hedge funds, private real estate, and commodities have historically been excluded from defined contribution plans. This white paper discusses how this trend is changing, and we expect the pace of change to accelerate over the next several years.
HEK Conference—“Alternatives Investing: Beyond the Asset Class Silos.” October 3 8:00am-2:45pm in Chicago. This event will highlight new, innovative and forward-thinking approaches on alternative investing for committees and boards looking to take their programs to the next level. It will feature a number of dynamic speakers, a thought-provoking agenda and the chance for Hewitt EnnisKnupp to share our latest high-level thinking and research with our clients and prospects. This event is for retirement plan sponsors, endowments and foundations, and other HEK clients and potential clients. Click here for the conference agenda and here for registration information.
HEK Monthly Call. September 18, 10:00-11:00am Central Time will be our next monthly conference call with clients, when we will discuss market trends and our latest thought leadership. Click here for a more details and registration information.
- Equity markets were down last week as the threat of military intervention in Syria concerned investors. However, they recovered some of their losses later in the week as the likelihood of an immediate attack by western nations receded. The S&P 500 outperformed the MSCI World Index with a loss of -1.8% against -2.3%. Year-to-date, the S&P 500 has outperformed the MSCI World Index (16.2% vs 12.2%).
- Small cap returns were lower than those for large cap stocks as the Russell 2000 returned -2.6% over the week. Year-to-date, small cap has outperformed large cap with a 20.0% return. Growth stocks outperformed value stocks (-1.5% vs. -2.0%) over the week as measured by the MSCI USA indices. Value has outperformed growth year-to-date (17.6% vs 15.1%).
- 10 and 30 year treasury yields fell by 3 bps to 2.78% and 9 bps to 3.70% respectively. 10 year German yields and 10 year Japanese government yields were down by 9 bps to 1.85% and 4 bps to 0.72% respectively last week.
- 20 year TIPS yields decreased by 1 bp to 1.16% over the week. 20 year breakevens fell by 7 bps to 2.20%.
- The Merrill Lynch US Corporate Index spread over treasury yields and the Barclays Capital Long Credit Index spread were unchanged at 154 bps and 188 bps respectively. US high yield bond spreads over Treasuries fell by 1 bps to 474 bps while the Emerging Market ($) bond spread over Treasuries increased 11 bps to 375 bps and is now up over 1% year-to-date.
- Commodities were up by 1.2% in US dollar terms over the week. This was mainly driven by rising oil prices as investors grew concerned that tensions in Syria could spill over into other Middle Eastern countries. The price of Brent crude oil hit a 6 month high during the week, ending 3.5% higher at $116/BBL. The Energy sector was up 1.7% as a result. Industrial Metals were down 3.9% with copper falling 3.5% to $7,078/MT. Agriculture prices were up 1.3% over the week. Gold added 0.1% to end the week at $1,398/ounce.
- The dollar appreciated against the euro and sterling, appreciated by 1.6% to $1.32/€ and 0.8% to $1.55/£ respectively over the week. The yen appreciated against the dollar by 0.6% to end the week at ¥98.12/$.
Source: Hewitt EnnissKnupp