The Third Quarter Ends with a Blast: Tech, Small Caps, and Beta

The US equity markets showed their strongest gains for any September on record in the 40-year history of the MSCI USA Index. Here, we highlight a few main observations through the lens of the Barra US Equity Model: •The Growth story was really a Technology story. •The Small Cap story was partially a real small cap effect, but in fact had an important Volatility story behind it (i.e., small caps benefited from being high beta and high volatility). •Certain sectors, like Health Care and Financial, benefited indexes across the board.