There was a trend of better performance among large stocks in October.
The US market experienced its best monthly performance so far this year in October, with the S&P 500 racking up a gain of just over 7%. This was the index’s best monthly performance since last November, the month of the Covid vaccine announcements.
During the month, the index also hit several new highs. It ended the month at 4,605 points. Year-to-date it has now seen a price return of 24%.
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Much of the rest of the US market saw positive returns in October. However, there was a trend of better performance among large stocks, with small- and mid-caps underperforming. The S&P MidCap returned 5.9%, while the S&P SmallCap 600 was up 3.4%. In contrast, the S&P 500 Top 50 outperformed, returning 8.3%. This index consists of 50 of the largest companies from the S&P 500 and therefore reflects US mega-cap performance.
Every US sector saw positive performance. The best returns were found among consumer discretionary companies, with the sector rising by 10.9%. This was closely followed by energy, with a return of 10.4%. Energy is now the best-performing sector year-to-date, with returns of 58%. Consumer services was the worst-performing sector in October, rising by 2.8%.
When it came to factors, growth saw the strongest performance, with the S&P 500 Growth Index returning 9.1%. Momentum and quality also experienced strong returns, at 7.4% and 6.1%, respectively. S&P 500 Low Volatility High Dividend was the laggard, returning 2%.
Returns were also strong in Europe, albeit below those in the US. The S&P Europe 350 index returned 4.7%, its best month since March. In common with the US, European small- and mid-caps trailed, with the S&P Europe MidCap returning 2.4% and the S&P Europe 2.8%.
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The S&P United Kingdom Index returned 2.3%. According to S&P, the UK and Switzerland were the top contributors to the S&P Europe 350 Index. Austria was the sole detractor.
The US resumed its regular role as the world’s best-performing major market. Compared to the S&P 500’s 7% return, the S&P Developed BMI returned 5.4%. Removing the US from that index sees its returns fall to 2.5%. Emerging markets also underperformed, returning 1% in October.
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