Good evening,

Market volatility reappeared in September as renewed concerns around inflation and international headlines weighted in on investor fears. September was the single largest monthly draw down since March 2020. The market’s “worry list” continued to expand and now includes the U.S. debt ceiling, the impact of global supply chain disruptions, and the prospect of defaults in the large Chinese property sector. China also witnessed the COVID-19 delta variant hitting multiple provinces over the summer months that drew containment measures and disruptions to economic activity.

While exposure to China remains a smaller portion of our client portfolios and international exposure remains at market weight, we remain constructive on international equities as a whole and see attractive longer-term secular opportunities that should coincide with the economic reopening and transition. Further, I have attached a very good read from Pimco that outlines our view of China and the phenomenon of the expected rise in the Chinese Middle Class as the country shifts towards common prosperity.

Please let us know if you have any questions as our entire team stands ready to listen and speak with you.

Have a great evening,

Devin

Read the PIMCO article here.