After a troubled March, April saw a return to calm in financial markets. The troubled banking sector in the United States experienced only a small burst at the end of the month after First Republic announced its first quarter figures. These showed that savings deposits had declined by more than $100 billion. Investors were worried for a while and temporarily fled to safe government bonds. Nevertheless, we saw that volatility (the degree to which prices move up and down) declined in April; for example, the VIX index (volatility indicator for equities) registered 15.8 (end of March: 18.7). The results were also limited in the areas of inflation and interest rates.
Shares
The MSCI All Countries World Index fell slightly (measured in euros) by 0.2% in April. Within this index, emerging markets did not do so well with a minus of 2.7%; developed markets (+0.1%) stayed closer to home. Among developed markets, Pacific excluding Japan (-1.4%) was again the dissonant and, on the contrary, Europe had the highest return (+2.5%).
Among emerging markets, it was the EMEA region (+2.3%) and Latin America (+1.1%) that could not prevent other regions (notably Asia: -3.9%) from pulling the broad index into the red.
Energy was the best performing sector; luxury consumer goods and IT were in the rear. In terms of style, we saw that “growth” and “value” did not differ much.
Bonds
The limited movements in the interest rate market were manifested, among other things, by a slight increase for German 10-year rates (up 0.02% to 2.31%). The outcome for Dutch 10-year rates was also limited (up 0.05% to 2.69%). On the contrary, the U.S. saw a small decline for 10-year rates (-0.05% to 3.41%). Risk premiums also barely moved in April. The premium for less risky corporate bonds fell 0.07% to 1.61%. More risky corporate bonds were virtually flat (-0.01% to 5.00%), as were emerging market government bonds (-0.01% to 4.83)%.