Total charitable impact


Investment performance

Market Summary
as of September 30, 2019

Influences on the markets during this quarter are a continuation of trends seen during the last quarter. Global economic growth shows signs of slowing, especially in the manufacturing sector. U.S. and China trade talks sputtered as tariffs continued to escalate. Uncertainty over the U.K. leaving the European Union persisted under newly appointed Prime Minister Boris Johnson.

Facing dimmer growth prospects and below-target inflation, a number of major central banks pursued a more accommodating monetary policy. The European Central Bank in September announced that it would push its deposit rate further below zero and start a new round of open-ended asset purchases in November. It also cut its projections for Euro zone growth and inflation for this year and next. The U.S. Federal Reserve, after raising short-term interest rates four times in 2018, cut rates twice during the quarter.

U.S. stock market

  • U.S. stocks once again performed better than their non-U.S. counterparts, returning 1.70% for the third quarter, as measured by the Standard & Poor’s 500 Index. The small gain lifted the market’s return for the 12 months ended September 30 to 4.25%. A majority of industry sectors finished the quarter in positive territory, but energy and health care in particular dampened results.
  • During the quarter, large-capitalization stocks outperformed their mid- and small-cap peers, and value stocks outpaced growth stocks.


International stock market

  • Non-U.S. stocks were positive for the quarter in local currencies, but those gains were erased by a U.S. dollar that rose versus the euro, the British pound, the Swiss franc, and other currencies. As a result, the FTSE Global All Cap ex US Index, which tracks non-U.S. stocks of all sizes in both developed and emerging markets, returned –1.65% for the quarter and almost the same amount, –1.66%, for the 12 months ended September 30.
  • Stocks in developed markets outside the United States outperformed their counterparts in emerging markets for the quarter. Within developed markets, stocks in the Pacific region outpaced European stocks.


U.S. bond market

  • The overall U.S. market for taxable investment-grade bonds, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index, returned 2.27%.
  • Investment-grade corporate bonds, as measured by the Bloomberg Barclays U.S. Corporate Bond Index, returned 3.05%. U.S. Treasuries, which currently account for almost 40% of the U.S. investment-grade bond market, returned 2.40% on average.
  • The yield of the benchmark 10-year U.S. Treasury note closed September at 1.66%, down from 3.06% a year earlier.


Money market

  • Money market yields fell in response to the Fed rate cuts. The average weighted maturity of Vanguard Federal Money Market Fund on September 30 was 38 days. The fund maintained its high-quality portfolio and continued to benefit from broad diversification and low fees.


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