THIRD QUARTER 2015 IN REVIEW
Heightened Risk Aversion Weighs on Risk Assets
- The U.S. economy has been holding steady, despite international concerns. Based on data received so far, third quarter gross domestic product (GDP) growth is tracking at 2.0-2.5%, following upwardly revised 3.9% growth in the second quarter as the economy rebounded from temporary factors restraining growth early in the year.
- The S&P 500 failed to produce a positive quarter for the first time since 2011, posting a negative total return of -6.4%.The quarter’s losses eliminated the gains for the year, bringing the S&P 500’s total return to -5.3% year to date.
- After a difficult second quarter, the third quarter of 2015 was a strong one for most sectors of the fixed income market. The Barclays U.S. Aggregate returned 1.2% during the quarter, bringing the year-to-date return back into positive territory at 1.1%.
- Oil’s bounce proved temporary as second quarter gains were given back. The Bloomberg Commodity Index was heavily influenced by oil’s decline and returned -14.5% for the quarter.
- In a quarter marked by increasing levels of volatility, low-beta equity market neutral managers led with gains.
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Please note: All return figures are as of September 30, 2015, unless otherwise stated.
IMPORTANT DISCLOSURES
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance reference is historical and is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly.
Past performance is not indicative of future results.
The economic forecasts set forth in the presentation may not develop as predicted.
Stock investing entails risk including loss of principal.
Bonds are subject to market and interest rate risk if sold prior to maturity.
Bond values and yields will decline as interest rates rise, and bonds are subject to availability and change in price.
Alternative strategies may not be suitable for all investors. The management of alternative investments may accelerate the velocity of potential losses.
Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, geopolitical events, and regulatory developments.
Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments, and exports less imports that occur within a defined territory.
The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS (agency and non-agency).
The Bloomberg Commodity Index is calculated on an excess return basis and composed of futures contracts on 22 physical commodities. It reflects the return of underlying commodity futures price movements.
This research material has been prepared by LPL Financial.
To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial is not an affiliate of and makes no representation with respect to such entity.
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