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Global equity indices rose by the most in six months in July, as buoyant economic and corporate data helped turn investors’ focus away from fears of a trade war.
As risk appetite improved, it was a case of a rising tide lifting all boats, with most regions, styles and strategies posting positive returns over the month. This was particularly true for benchmark indices.
The STOXX® Global 1800 Index rose 3.1% in dollar terms, its best monthly showing since January, as European and US markets advanced. The STOXX® Asia/Pacific 600 Index underperformed as the value of Japanese holdings fell in line with the yen.
Minimum variance strategies stood out for their strong returns in July even as investors increased their risk tolerance. They also achieved the gains with lower volatility levels relative to their benchmarks and to their own recent history.
Environmental, social and governance (ESG) strategies performed broadly in line with benchmarks, as did dividend strategies.
On the other hand, thematic investing proved challenging in an environment of broad-market gains. All six STOXX Thematic Indices underperformed the STOXX Global 1800 Index.
Pure factor investing showed negative results over the month. All seven iSTOXX® Europe Factor Market Neutral Indices, which neutralize systematic risk by holding a short position in futures on the STOXX Europe 600, posted losses.
