Despite the volatility created by the Brexit vote, equity markets in June managed to post the fourth consecutive month of positive returns. The S&P 500 increased by 0.26% for the month. Value stocks increased and growth stocks retreated somewhat during the month as more defensive stocks came into favor. Developed international markets struggled, decreasing by 3.56% for the month. Interestingly, emerging markets led the pack and increased by 3.3%.
The U.S. fixed income markets once again provided positive returns. Interest rates continued to decrease and the 10-year Treasury yield approached all-time low levels that were established in July 2012. In the early morning hours after the Brexit vote, the 10-year traded just below 1.4% (1.38% is the record low) before selling off somewhat to close the month at 1.49%. To put this in perspective, the 10-year was at 1.84% at the end of May and 2.27% at the beginning of the year! The Barclays Capital U.S. Treasury Index increased 2.21% in June, while the Barclays U.S. Corporate High Yield Index increased by 0.92%. The Barclays Aggregate Bond Index increased by 1.80%.
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