Market Insights

Market Update. Trade optimism & rate cuts rally global equities in September

October 15, 2019


Market Update. Trade optimism & rate cuts rally global equities in September

Market Insights

The month at a glance

All WealthBar equity weighted portfolios ended September higher after a volatile month in August. Markets rallied as the US-China trade talks started to appear more optimistic and both the European Central Bank (ECB) and the US Federal Reserve (the Fed) introduced key rate cuts. 

Read on for a deeper dive into how these events are shaping the market or jump to performance.

September Market Movers

Double dose of stimulus: both the ECB and the Fed cut interest rates. 

  • The ECB cut rates to a new record low of -0.5% to combat a weakening eurozone economy. It also announced that it will restart its bond buying program this November to the tune of €20 billion ($29 billion CAD) per month. 
  • Meanwhile, the Fed cited its decision to cut interest rates as a preemptive move to shield the US economy from global weakness and the trade dispute.
  • The full impact of the rate cuts to the global economy will take some time to filter through the system. However, they’ve had a positive impact on equity markets to date. 

Global equity markets rallied as US and China trade talks turned more optimistic.

Continue to expect some volatility as we head into the final quarter of 2019. Here’s what we’re watching:


ETF Portfolios

The fixed income asset class delivered flat to modestly lower returns, while all other equity classes finished the month higher. The best performing assets classes were Canadian Preferred Shares (HLPR +3.58%) and Canadian REITs (HCRE +2.70%). During the month international indexes (Europe, Australasia, and Far East) (XEF +2.47%) outperformed US and Canadian equity indices. 

ETF Balanced, Growth and Aggressive Portfolios benefited from this equity performance, while ETF Safety and Conservative lagged from fixed income but gained from their exposure to equity allocation, preferred shares, and Canadian REITs.   

September performanceYearly performance
ETF Safety Portfolio0.54%3.12%
ETF Growth Portfolio1.48%4.42%
ETF Conservative Portfolio0.89%3.22%
ETF Balanced Portfolio1.26%4.26%
ETF Aggressive Portfolio1.67%5.32%

Private Investment Portfolios

The Aggressive Private Portfolio benefited from its 25% exposure to NWM US Tactical High Income Funds (+3.41%). The Balanced Portfolio achieved a return that was marginally lower than the North American indices. The Safety Portfolio saw a drag from its fixed income exposure, which was modestly lower, but gained through its exposure to the mortgages asset class and NWM Core Fund (+1.21%).

September performanceYearly performance
Safety Private Portfolio0.52%4.96%
Balanced Private Portfolio1.21%5.85%
Aggressive Private Portfolio1.67%6.33%
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