Author: David I. Templeton, CFA, Principal and Portfolio Manager

Almost any asset class owned by investors rewarded them with a positive return in the third quarter. The market saw broader participation from stocks other than the so-called Magnificent 7 stocks. For the third quarter one of the best returning asset classes was the S&P 600 SmallCap Index, followed by broad international stocks, including emerging markets and then the S&P 500 Index. Other equity styles outperformed the S&P 500 Index too, with the S&P 500 Dividend Aristocrats Index up low double digits in the third quarter. Even bond investors enjoyed favorable returns, partly generated in anticipation of the recent Federal Reserve interest rate cut. The S&P U.S. Aggregate Bond Index was up about 5.0% in Q3 and the S&P U.S. Treasury Bond Index was up 4.5%. The strong quarterly bond returns erased the negative returns generated by bonds in the first half of the year.

More thoughts on the balance of the year are found in our Fall 2024 Investor Letter.

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