**Global Equity Markets Continue to Rally**
The third quarter saw a strong performance in global equity markets, with the U.S., international developed, and emerging markets all experiencing positive growth. Two key narratives have emerged: the U.S. Federal Reserve’s decision to cut interest rates, and China’s efforts to stimulate its economy.
Our investment strategies focus on long-term growth, prioritizing businesses that align with secular trends and have strong competitive advantages and market positions. We seek out companies with high profit margins, robust balance sheets, and consistent cash generation, which will endure even in challenging economic conditions.
In the third quarter, the Baird Chautauqua International Growth Fund returned 9.46%, outperforming the MSCI ACWI ex-U.S. Index, while the Baird Chautauqua Global Growth Fund returned 5.25%, underperforming the MSCI ACWI Index. Sector performance was positive, with real estate, utilities, and financials leading the way. Country performance was mixed, but mostly positive, with China and Hong Kong experiencing significant gains.
The Fed’s decision to cut interest rates by 50 basis points in mid-September has paved the way for other central banks to follow suit, particularly in emerging markets. This easing cycle is expected to support economic growth and stabilize financial markets.
In China, the government has introduced a range of stimulus measures to boost market confidence, including cuts to the benchmark interest rate and reserve requirement ratio, as well as fiscal stimulus to support the property market and consumption. These measures have helped to drive a rally in Chinese stocks, with the CAPE ratios of China and Hong Kong stocks remaining near their 20-year lows.
We believe our investment strategies are well-positioned to navigate the current market environment, with a focus on companies that benefit from long-term secular trends and have strong competitive advantages and market positions. Our portfolios are designed to outperform market growth rates over an investment cycle, and we remain confident in their ability to deliver strong returns over the long term.
Leave a Reply