Global Equities Grapple with a Global Pandemic
In the first quarter, the MSCI All Country World Index (ACWI) declined 21.4%, amid significant global market weakness due to the COVID-19 pandemic. The Index declined 33.6% from peak (February 19) to trough (March 23), before rising 16.5% over the next three trading days to finish down 23.5% from its February peak. Market volatility surged in the quarter with the CBOE Volatility Index®, or VIX®, reaching an all-time closing high of 82.7 on March 16, and daily price swings averaging 4.8% for the Russell 1000® Growth Index throughout March.
Global equities started out the quarter benefiting from better-than-expected earnings reports, only to plummet in March as the COVID-19 virus reached pandemic levels and countries worldwide reacted with what previously would have been considered draconian measures to halt the spread of the disease and protect their populations. Social distancing, shelter-in-place rules, and government directives ultimately led businesses to close and traditional commerce to be put on hold in many countries.
The commentary is the opinion of SGA. This material has been prepared using sources of information generally believed to be reliable; however, its accuracy is not guaranteed. Opinions represented are subject to change and should not be considered investment advice or an offer of securities.
Past performance is not an indication of future results.
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Index definitions: CBOE Volatility Index (VIX) is a measure of implied volatility, based on the prices of S&P 500 Index options; a rising VIX indicates expectations for rising S&P 500 volatility, while a lower VIX indicates expectations for quieter trading. MSCI All Country (AC) Asia measures large and mid-cap equity performance of Asia’s developed and emerging markets. MSCI AC Asia Pacific measures large and mid-cap equity performance of developed and emerging markets countries in the Asia Pacific region. MSCI USA measures large and mid-cap U.S. equity performance. MSCI World measures equity performance of developed global markets. MSCI All Country World (ACWI) measures equity performance of developed and emerging markets. MSCI EAFE® measures developed foreign market equity performance, excluding the U.S. and Canada. MSCI AC World ex U.S. measures equity performance of developed and emerging markets, excluding the U.S. MSCI Emerging Markets measures equity market performance in global emerging markets. MSCI Europe measures equity market performance of Europe’s developed markets. MSCI Latin America measures equity performance of Latin America’s emerging market countries. All MSCI indexes are free float-adjusted market cap-weighted and calculated on a total return basis with dividends reinvested.