October was a painful month for investors with no place to hide in many sectors, styles, countries, or bonds. Major equity styles declined significantly especially in small caps. The only market sectors to provide investor gains were finance and utilities. The amount of dispersion across countries was surprising. Some selected country funds actually gained for October. Bonds did not prove to be a safer haven. The long bond sector was down 4% and non-dollar bonds were hurt by the gains in the dollar. Credit moved in tandem with equity markets.
Across the board equity styles showed negative returns for October with the biggest loses in small cap growth. The best performing asset class was emerging markets. Some investors viewed EM as a safe uncorrelated haven for cash.