August 2023

Monthly Market Update


Global equities closed mixed as a mid-week sell-off pared gains across the week. In the US, statements made by Fed Officials at the Fed’s Jackson Hole Symposium sparked a wave of profit-taking, with investors concerned that the Fed may not be finished with its rate-hiking cycle. The S&P 500 & Nasdaq notched gains, while the Dow Jones Industrial Average declined in contrast – value equities having come under pressure. In Europe, investors’ optimism over an impending end of the European Central Bank’s (ECB) rate-hiking cycle saw benchmark indices close higher. The Pan-Europe STOXX 600, German DAX, French CAC 40 & British FTSE 100 gained across the week. On the commodities front, oil prices declined last week as ongoing worries over China and mixed macro news in the US spurred global demand concerns. WTI and Brent crude finished last week lower at $79.83 and $84.48 per barrel, respectively (despite another larger-than-consensus decline in US crude inventories). In contrast, gold prices broke a nine-day losing streak, ending last week higher at $1939.90 per troy oz.

Outlook: We are likely to see another equity dip in the near term before a consolidation and recovery by the end of the year. The dip will be driven by still somewhat expensive valuations and corporate earnings compression, indicating a recession, which will become more evident with each earnings season. We estimate that financial assets will commence their recovery after interest rates and inflation reach their peak. The ongoing valuation reset offers interesting opportunities for investors with a medium-to-long-term horizon. We believe that buying high-quality, profitable, blue-chip equities with strong balance sheets, positive cashflow yield, and high dividends will most likely result in double-digit return in the next 12 months. Investment-grade fixed-income securities also offer attractive yields at these levels, without subjecting portfolios to much risk.

Developed Markets

North America
Benchmark indices closed mixed for the week as investors reacted to mixed economic readings signals and grew concerned about statements made by Fed Officials at the Jackson Hole Symposium. The week saw growth stocks outperform their value counterparts, with growth indices lifted further by notable revenue & profit beats by chipmaker Nvidia. Value stocks were weighed down by S&P Global downgrading the credit ratings of five regional banks. As a result, the Dow Jones Industrial Average lost 0.42%. In contrast, the S&P 500 & Nasdaq Composite gained 0.84% and 2.26% respectively. Both the broad and tech-heavy indices recorded their first winning week in over a month. Nonetheless, the Dow and S&P have lost approx. 3.4% and 4%, respectively in August, while the Nasdaq lost roughly 5.3%. At the annual Fed conference in Jackson Hole, Wyoming, Fed Chair Jerome Powell highlighted some signs of continued economic growth and strong consumer spending, indicating that the Fed would “proceed carefully” with additional hikes. Powell stated: “Although inflation has moved down from its peak — a welcome development — it remains too high. We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.” Powell acknowledged that higher rates would continue to slow growth in industrial production and wages. Nonetheless, Powell noted that economic growth remains above its long-term trend, boosted by a bounce in the housing sector. Markets currently appear to be pricing in an approx. 20% likelihood that the Fed would hike rates again at its upcoming meeting in September (as per CME Group’s FedWatch tool). Meanwhile, new Federal data released on Wednesday showed that US job growth came in weaker than previously projected by 306,000 jobs. Despite the downward revision, America’s labour market remains historically strong. This amounts to approx. 25,000 fewer jobs added per month.

Europe & UK
European indices also closed higher with investors hopeful of an end to rate hikes by the European Central Bank (ECB). The pan-European STOXX Europe 600 Index, French CAC 40 & German DAX gained 0.66%, 0.91% & 0.37%, respectively. The UK’s FTSE 100 index also rallied, gaining 1.05%. The August Purchasing Managers’ Index (PMI) placed the EU’s business activity at its lowest level since the pandemic – attributed to a sharp contraction in the services sector and dismal manufacturing figures. The PMI for manufacturing came in at 43.7—a slight improvement from July but still well below 50, the level that indicates a contraction in activity. The figures give cause for concern for the ECB, who expects to take its next interest rate decision in September. The ECB has raised borrowing rates in a bid to curb rising inflation & bring down consumer prices. In July, the ECB implemented its 9th consecutive hike of 25 basis points, bringing the deposit rate to 3.75%, a joint record high last seen in 2000. Eurozone does show signs of abating – dropping to 5.3% in July from 5.5% in June, however, it remains well above the ECB medium-term target of 2%. Core inflation (without energy and food prices) also remains stubbornly high at 5.5%. Markets are still anticipating one more rate hike this year. Economic output across the EU’s powerhouse, Germany appears worse for wear, with Germany’s central bank, the Bundesbank having stated in its monthly report that it expects German economic output to remain “largely unchanged” in the three months ending September 30 – this would ultimately mean that Germany would post 0% zero growth for two consecutive quarters. The Bundesbank does anticipate a recovery in private consumption, but added that this could be offset by weak foreign demand (which would result in a decline in industrial production). Adding to this, German business confidence fell to its lowest levels in a year – the Ifo Institute’s business confidence index having fell to 85.7. Similar weakness was seen in the UK, where business activity recorded its weakest month in August since January 2021. The Flash UK PMI Composite Output Index fell to 47.9 from 50.8 in July, the first contraction since January, with new orders shrinking for a second consecutive month. On inflation, data from the British Retail Consortium showed that price rises in British shops slowed to their lowest rate of growth just under a year. The BRC said on Tuesday that prices rose 6.9% in the year to August, down from 8.4% in July. Fresh food inflation slowed to 11.6% in August, down from 14.3% in July. Inflation for non-food items was unchanged at 4.7% this month.

Japanese equities rallied on the back of the previous week’s declines, posting four days of strong positive performance before giving up much of the gains across Friday sell-off. The benchmark Nikkei 225 finished the week 0.6% higher and the broader TOPIX up 1.3%. At the Jackson Hole Symposium, Bank of Japan (BoJ) Governor Kazuo Ueda said the pace of economic activity in China has been a disappointment that could cloud Japan’s economic outlook. Economic output across China remains “on the weak side,” Ueda said, adding: “The underlying problem appears to be the adjustment in the property sector and its spillover to the rest of the economy.” Ueda did say that the hit to Japan had been partially offset by the strength of the US economy. Ueda said that as a result of the weakness in Chinese output (along with geopolitical risks) Japanese firms appear to be diversifying production from China into the rest of Asia and the United States. “Longer run effects of geopolitical factors on the Japanese economy are unsurprisingly very uncertain,” Ueda said, adding that “the tit-for tat war,” mainly in the semiconductor sector, between major advanced economies and China was a risk. With this, Japan’s flash composite PMI data (combining both manufacturing and services sector activity) rose to 52.6 in August, up from 52.2 in July. In addition, Japanese factory activity shrank for a 3rd consecutive month in August, however, the pace of activity decline appeared to be slowing. Meanwhile, Japanese core inflation rate (excluding fresh food but includes fuel costs) slowed to 3.1% in July from 3.3% in June – remaining above the Bank of Japan’s 2% target for a 16th consecutive month. Food prices in Japan rose by 8.8% from a year earlier in July 2023 – the highest rise since September 1976, after an 8.4% gain in the prior month. This was the 23rd straight month of food inflation. Headline inflation was unchanged at 3.3% but was notably higher than market forecasts of 2.5%.

Emerging Markets

Chinese stocks fell across the week, as a cloudy economic outlook weighed on investor sentiment. The blue-chip CSI 300 Index and the Shanghai Composite Index both recorded 2% declines for the week, adding to both indices year-to-date losses. The CSI 300 Index is now trading at its lowest level since November 2022, while the Shanghai Composite Index is at its lowest level since December 2022. China continues to slide into deflation for the first time since 2021, consumer prices have fallen 0.3% year-on-year in July as consumers cut back on discretionary expenses. The property market remains dismal, while exports continue to dwindle and youth unemployment soars. The reality of a so-called deflationary spiral – where consumers defer spending in expectation of lower prices, appears to now be taking shape in the property sector. Prices fell 0.2% month-on-month across the biggest cities in July, and total sales from the biggest developers are down sharply this year. On the trade front, exports for July dropped by a notable 14.5% when compared to July 2022. Imports saw similar declines, dropping by 12.4% year-on-year in dollar terms. The consumer price index (CPI) has seen a decline of 0.3% from last month, while the producer inflation index has declined by 4.40%. Core inflation (excluding food and energy) has edged up but remains at 0.8%. As mentioned before, youth unemployment continues to represent a headwind for the nation, but China’s government last week halted publication on youth unemployment figures, amid concerns that it would reveal increased weakness. China has also cracked down on corporate due diligence around the nation. In response, US national security adviser Jake Sullivan called on China to be more transparent about the state of its economy, adding “These are not in our view responsible steps.” “For global confidence, predictability and the capacity of the rest of the world to make sound economic decisions, it’s important for China to maintain a level of transparency in the publication of its data.” Sullivan added that the White House had in recent months seen a “reduction in the level of transparency and openness with respect to recording basic things” as well as a crackdown on companies that offer “basic information to the world on the puts and takes in the Chinese economy”.

Indian indices declined as investors reacted to mixed global economic readings. The BSE Sensex & Nifty 50 indices closed marginally lower. Retail inflation breached the Reserve Bank of India’s (RBI) comfort zone and surged to a 15-month high of 7.44% in July, mainly on account of a spike in food prices, as per government data. The Reserve Bank of India’s (RBI) tolerance band remains at 2%-6%. At the latest Monetary Policy Committee (MPC) meeting, the RBI opted to hold its key lending rate steady as expected but moved to reduce the amount of cash in the banking system as inflation concerns resurfaced following higher-than-usual seasonal spikes in food prices. Led by vegetables, food inflation in India soared to an over three-year high of 11.5% in July. With inflation anticipated to remain elevated, many investors grow fearful that the RBI could revisit its monetary policy stance. MPC member, Jayanth Varma voiced his view on inflation, adding that Food inflation tends to be ‘transitory’ if monetary policy remains restrictive as it currently is, adding the spike in July’s inflation print was not surprising. “My view has been that there is much greater urgency in bringing inflation to within the band than there is to bringing it to the centre of the band,” Varma said.

Major MENA region benchmarks closed mixed across the week. Dubai’s DFMGI gained 1.42%, while the Saudi Arabian TASI lost 0.23%. MENA region heavyweights Saudi Arabia and the United Arab Emirates have been invited to become members of the BRICS group of developing nations in the bloc’s first expansion in over a decade. The bloc also extended invitations to Iran, Egypt, Ethiopia and Argentina. All six nations invited had already expressed an interest in joining. The BRICS group currently comprises of Brazil, Russia, India, China and South Africa. Saudi Foreign Minister Prince Faisal bin Farhan said the kingdom was awaiting details from the BRICS group on the nature of the membership, and would take an “appropriate decision” accordingly. “The membership will take effect from the first of January, 2024,” South African President, Cyril Ramaphosa said. “The UAE’s BRICS membership creates huge economic, trade, and investment opportunities that will bring about a paradigm shift not only in the BRICS countries’ economic environment but also in the global economy,” said the UAE’s Minister of Economy, Abdullah bin Touq Al Marri. Al Marri added, “Today’s economic blocs are one of the most visible trends shaping the current and future economic landscape, and they would make a significant contribution to the global economy’s stability and growth, the development of international trade and investment flows, and the flexibility of global supply chains.” “Membership in this new economic bloc is becoming increasingly important as the UAE promotes its economic openness policy and grows its network of global commercial contacts,” he explained. Meanwhile, at the G20 Trade & Investment Ministers’ meeting, Saudi Araba’s Minister of Commerce, Dr.Majid bin Abdullah Al-Qasabi reported that growth of the Kingdom’s foreign trade amounted to $172 billion, adding that non-oil exports grew by 40% between 2018-2022, amounting to $28.7 billion

Commodities and Forex

Oil prices declined last week as ongoing worries over China and mixed macro news in the US spurred global demand concerns. WTI and Brent crude finished last week lower at $79.83 and $84.48 per barrel, respectively, despite another larger-than-consensus decline in US crude inventories. In contrast, gold prices broke a nine-day losing streak, ending last week higher at $1939.90 per troy oz.

The US dollar appreciated 0.84% against a basket of currencies last week, as statements from Fed Chair Powell suggested that policymakers have not yet concluded the rate-hiking cycle. The euro depreciated to $1.0807, while the Japanese yen appreciated to ¥146.34 against the dollar.


WTI Oil ($/barrel)$90.77$83.63$70.64$80.26
Brent Oil ($/barrel)$93.93$86.86$74.90$85.91
Gold ($/oz)$1966.30$1986.30$1968.00$1842.20
Natural Gas ($/mmBtu)$2.64$2.77$2.80$4.47


Euro (€/$)1.06611.08451.09111.0701
Pound (£/$)1.23821.26641.26961.2063
Japanese Yen (¥/$)147.85145.44144.31130.97
Swiss Franc (CHF/€)0.95660.95790.97650.9890
Chinese Yuan Renminbi (CNY/$)7.18697.17137.22306.9225

Index Valuations

Index Return

Equities1 WeekMTDQTDYTD
S&P 500-0.12%-1.20%0.35%17.30%
DJ Industrial Average0.14%-0.21%1.15%6.14%
Russell 2000-0.20%-2.70%-1.92%6.01%
Russell Midcap-0.35%-1.96%-1.60%7.26%
STOXX Europe 50 (€)1.37%-0.05%-2.17%16.58%
STOXX Europe 600 (€)1.60%0.83%0.38%11.27%
MSCI EAFE Small Cap0.80%-1.35%-0.37%5.49%
FTSE 100 (£)3.12%3.69%3.47%6.82%
DAX (€)0.97%-0.34%-1.58%14.15%
FTSE MIB (€)2.35%0.22%2.75%26.70%
CAC 40 (€)t1.91%0.85%-0.23%16.39%
SWISS MKT (CHF)2.28%0.65%-0.73%7.52%
TOPIX (¥)2.94%4.13%6.14%30.23%
Hang Seng (HKD)0.08%-0.57%-2.22%-4.90%
MSCI World0.45%-0.77%0.18%15.64%
MSCI China Freet-1.00%-0.99%0.20%-1.01%
MSCI EAFE1.67%0.03%-0.67%11.38%
MSCI EM1.27%0.63%0.41%5.53%
MSCI Brazil (BRL)3.08%2.95%1.71%8.80%
MSCI India (INR)1.18%4.32%6.44%11.14%

Fixed Income

(15/09/23)1 week %1 month %6 months %YTD %1 year %2 years %
US dollar Adventurous1.21%-0.24%9.55%11.67%14.41%-15.49%
US dollar Blue Chip0.60%-0.46%5.20%6.58%4.49%-11.23%
US dollar Cautious0.35%-0.43%2.38%3.83%1.58%-13.13%
US dollar Defensive0.13%-0.36%-0.40%1.14%-0.69%-15.27%
US dollar Performance0.89%-0.39%7.84%9.30%8.41%-10.27%

Blend Fund Performance Year To Date:

Blend Fund Performance Since Inception:

Direct Fund Name

(15/09/23)1 week %1 month %6 months %YTD %1 year %2 years %
Aditum Global Discovery1.55%0.48%2.58%-0.95%3.17%-
BlackRock GF World Healthscience USD0.47%-1.11%7.80%0.68%7.84%-0.33%
BlackRock GF World Mining USD4.52%2.64%2.99%-2.49%11.65%1.14%
Emirates Global Sukuk-0.23%-0.76%0.00%1.15%0.68%-7.68%
Emirates MENA Fixed Income-0.14%-1.82%-1.69%-1.28%0.32%-13.34%
Emirates MENA Top Companies0.38%-1.96%8.90%5.82%-3.06%6.37%
Franklin Gold and Precious Metals USD2.88%1.71%-3.43%-4.80%8.96%-21.78%
Harris Associates Global Equity1.04%-1.87%10.28%12.55%15.00%-7.87%
Loomis Sayles Global Growth Equity Fund0.14%-1.28%14.66%24.76%20.91%-12.63%
Loomis Sayles Multisector Income Fund0.14%-0.20%-0.54%1.17%0.75%-13.83%
PineBridge Japan Small Cap Equity-0.44%0.76%-5.58%-10.68%-3.93%-36.48%
UBAM 30 Global Leaders Equity $0.05%-0.37%9.46%11.74%13.39%-10.08%
UBAM Swiss Equities-0.32%1.77%2.58%4.49%6.43%-23.59%
iShares US Corporate bond Index-0.18%0.66%-0.63%1.56%1.87%-13.98%

Zurich Managed Funds

(15/09/23)1 week %1 month %6 months %YTD %1 year %2 years %
US dollar Adventurous1.21%-0.24%9.55%11.67%14.41%-15.49%
US dollar Blue Chip0.60%-0.46%5.20%6.58%4.49%-11.23%
US dollar Cautious0.35%-0.43%2.38%3.83%1.58%-13.13%
US dollar Defensive0.13%-0.36%-0.40%1.14%-0.69%-15.27%
US dollar Performance0.89%-0.39%7.84%9.30%8.41%-10.27%

Zurich Mirror Funds

(15/09/23)1 week %1 month %6 months %YTD %1 year %2 years %
ZI Canaccord Genuity Balanced0.06%-0.51%3.38%4.34%3.59%-15.85%
ZI Canaccord Genuity Growth-0.09%-0.56%5.08%6.34%5.51%-17.19%
ZI Canaccord Genuity Opportunity0.27%0.11%6.70%7.15%6.98%-15.23%
ZI Emirates Active Managed fund-0.41%-0.21%3.52%5.77%3.42%-19.57%
ZI Emirates Balanced Managed fund-0.28%-0.46%1.65%2.94%1.13%-20.92%
ZI Emirates Emerging Market Debt1.22%-0.01%-1.70%-0.46%2.03%-26.90%
ZI Emirates Emerging Market Equity-1.21%0.23%2.55%2.21%0.76%-28.97%
ZI Emirates Islamic Balanced Managed fund-0.65%-0.77%2.62%3.03%1.38%-12.66%
ZI Loomis Sayles U.S. Growth Equity0.27%0.53%24.18%38.83%33.31%0.04%

Disclaimer: This document is for information purposes only. This document does not constitute an offer, an invitation to offer, or a recommendation to enter into any transaction, nor does it constitute investment advice. Its contents are derived from sources generally believed to be reliable although no representation is made that it is accurate or complete and we accept no liability with regards to your reliance on the same. Past performance is not necessarily indicative of future results and prices and availability are subject to change without notice. Availability shall be subject to the relevant law and regulation and pursuant to the relevant Fund Prospectus and relating legal documents.  Where overseas investments are held, the rate of exchange may cause the value of investments to go down as well as up. The value of investments and any income from them can go down as well as up and you may not get back the amount originally invested. Chart Source: GSAM and Bloomberg as of close of trading on August 31, 2017. Chart data shows next 12 month P/E ratio from August 2007 to the current period. 12m forward P/E(x) refers to price-to-earnings ratio for the next 12 months, which is a valuation measure applied to respective broad equity indices. Please see additional disclosures at the end of this presentation. All data is denominated in USD unless noted otherwise.† Data is released weekly, as of Monday. If data displays an asterisk: 

* Data is lagged by 1 day.
**   Data is lagged by 2 days.