Global equities performed strongly in Q3 2024, despite volatility. The quarter began with a sharp correction in early August due to weaker-than-expected jobs data, raising recession fears. However, markets rebounded in September after the Federal Reserve’s 50 basis point rate cut, which marked the start of an easing cycle and pushed risk assets to new highs. The S&P 500 gained 5.9% for the quarter, while small caps and value stocks outperformed, signaling improved market breadth as interest broadened beyond mega-cap growth stocks.

The MSCI EAFE Index, representing developed markets, rose 7.4%, while emerging markets, buoyed by government stimulus in China and strong performances in Thailand and South Africa, saw the MSCI EM Index climb 8.8%.

Bond markets responded positively to the Fed’s easing, with the Bloomberg Aggregate Bond Index returning 5.2%. High-yield bonds rose 5.3%, and emerging market debt returned 6.1%, supported by improved risk sentiment and a weaker U.S. dollar.

Commodities faced headwinds, with the Bloomberg Commodity Index declining 0.6%. Energy prices dropped due to lower demand and oversupply, despite geopolitical tensions in the Middle East. However, precious metals like gold performed well as safe-haven assets remained attractive amid uncertainty.

As of September 30, 2024, OCERS’ portfolio had a market value of $24.5 billion, up from $23.6 billion at the end of the second quarter. OCERS’ portfolio generated a quarterly return of 4.1% relative to the policy benchmark return of 4.3%.