As of September 30, 2013
International equity markets delivered strong performance during the quarter ending September 30, 2013. International investors were encouraged by relative economic stability and signs of recovery around the globe. The MSCI Europe, Australasia, Far, East (EAFE) Index1 returned 11.56%. International Markets outperformed U.S. markets during the quarter. The Standard & Poor’s 500 Index2 returned 5.24% over the three month period. European markets were notable for their outperformance, gaining 13.61% as measured by the MSCI Europe Index.3 Japanese stocks in the EAFE Index lagged with 6.67% returns. Also notable during the quarter was the rebound in Emerging Markets (EM) following negative returns during the first half of 2013. The MSCI Emerging Markets Index4 increased 5.77%. However, there was large dispersion in regional EM returns. For example, Indonesian equities lost 23.23%, based on the Indonesia SE Composite Index.5 Over half of the decline was due to currency depreciation over fears of the negative impact of liquidity withdrawal by the U.S. Federal Reserve (the Fed). At the opposite end of the EM spectrum, Polish equities represented in the MSCI Emerging Markets Index gained 17.17%. As a key exporter to the eurozone, Poland’s economy is highly leveraged to a European economic recovery which appeared to gain strength during the three-month period ended September 30, 2013.
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1The MSCI EAFE (Europe, Australasia, Far East) Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of the following 22 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. Performance for the MSCI EAFE Index is shown “net,” which includes dividend reinvestments after deduction of foreign withholding tax. One cannot invest directly in an index.
2The S&P 500 is the Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices. One cannot invest directly in an index.
3The MSCI Europe Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed markets in Europe. The MSCI Europe Index consists of the following 16 developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. One cannot invest directly in an index.
4The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. One cannot invest directly in an index.
5Indonesia SE Composite Index is an index all stocks that trade on the Jakarta Stock Exchange. One cannot invest directly in an index.