The Pivotal Point of View Commentary
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September performance across the board was almost a mirror image of August with almost everything falling. Most major equity markets experienced losses except for Shanghai (CSI 300, Shanghai) and Japan (Nikkei, Topix).
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Hedge funds outperformed significantly. Part of this may be explained by hedge funds’ general bias toward value which significantly outperformed growth in September, as well as a further shift toward value during the month.
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One the clearest ways to observe the markets views on Covid, the economy and inflation is captured through the performance of PivotalPath’s Social Distance Winners Basket (think Peloton, Zoom, Netflix etc.) vs. PivotalPath’s Social Distance Losers Basket (think Darden, Marriott, Delta, etc.) This month Social Distance Losers s had their revenge, returning 3.6% vs. a loss of 3.1% for Social Distance Winners, increasing its lead YTD to 13.6% (19.6% vs. 6%).
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This helps partially explain why Equity Diversified managers, with considerable positive exposure to equity markets, were able to minimize their losses on the month.
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Energy / Utilities /Industrials performed well again +1.8% in September after rising 1.5% in August. This occurred while crude oil futures have been whipsawed +9.5% in September -7.4% in August.
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Energy / Utilities /Industrials was the 5th best performer over the past year of the 40 strategies PivotalPath covers.
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Global Macro: Commodities, by far, had the best September performance across sub-indices posting +8% with huge separation from second best performer in Credit: Distressed up 2.2%.