Quarterly Investment Review: Q3 2022

After a rally in July, both shares and bonds turned lower and registered negative returns for Q3. Any hopes of interest rate cuts were dashed as central banks reaffirmed their commitment to fighting inflation. The Federal Reserve, European Central Bank and Bank of England all raised interest rates in the quarter.

The heightened market volatility during third quarter continued as central banks and investors continued to grapple with persistent inflation amid a slowing growth backdrop. Government bond yields were generally higher and credit spreads wider across the global market, weighing heavily on market returns. Across global credit, returns were poor as the market drawdown continued with credit spreads widening amid fears that tighter monetary policy may undermine further economic growth prospects.