2nd Quarter of 2014

Global stocks enjoyed moderate gains, supported by accelerating M&A activity and the fact that the U.S. economy was rebounding from a harsh winter. Energy stocks rallied on fears of a potential oil and gas shortage amid continuing turmoil in Iraq and Ukraine. Bonds also benefited as interest rates tumbled in developed markets. Political uncertainty weakened in certain countries, making emerging markets stocks rise sharply.

U.S. stocks reached multiple new highs, with the S&P 500 Composite Index notching its sixth consecutive quarterly rise, the longest streak of quarterly gains since 1998. The index climbed +5.2% throughout the quarter. The Nasdaq Composite and the Dow Jones Industrial Average rose +5.3% and +2.8%, respectively.

European stocks advanced amid another round of stimulus measures by the European Central Bank to boost economic growth. Moreover, M&A activity soared, particularly in the health care sector, where several large cross-border deals dominated the market. Overall, the MSCI Europe Index rose +3.0%.

Japanese stocks had strong gains in June, boosted by revised data showing the world’s third largest economy grew at a faster pace than initially reported. Fears over consumption tax hike weakened. The MSCI Japan Index rose +4.9% for the quarter.

Emerging markets stocks climbed amid hopes for an improving global economy and as political uncertainty in several markets seemed to weaken. In particular energy stocks had strong gains due to rising oil prices, as the geopolitical risk increased in the Middle East. The MSCI Emerging Markets Investable Market Index advanced +5.0%, outpacing developed markets.

Barclays Global Aggregate Index rose +2.5% for the quarter.