Look Out Below: September 2023 HANDLS Monthly Income Report

The graph and table above provide return data for major income-oriented asset categories for the month of September 2023 and YTD 2023. Returns for each asset category are based on the returns of the constituent(s) in the Nasdaq HANDLS™ Base Index representing that category. Also included are returns for the Nasdaq 5HANDL™ Index, the Nasdaq 7HANDL™ Index and the Nasdaq 10HANDL™ Index.

Look Out Below

A stubbornly hot economy drove a large upward move in interest rates that took a bite out of the securities markets in September. The Large Cap Equity Core category lost 5.0% while the Core Fixed Income category fell 2.6% for the month.

The only category in the Nasdaq Dorsey Wright Explore portion of HANDLS Indexes to earn positive returns in September was MLPs, which continued to benefit from higher oil prices driven by OPEC production cuts. Particularly hard hit in September were interest-rate sensitive categories that investors have historically relied upon for high distributions, including Utilities (-5.7%) and REITs (-7.1%), the latter of which is fighting headwinds from the COVID-driven slowdown in commercial real estate.

The Nasdaq 5HANDL Index returned -3.1% for the month. The Nasdaq 7 HANDL Index, the 1.3x leveraged version of the index, returned -4.1% in September while the Nasdaq 10 HANDL Index, the 2.0x leveraged version of the index, delivered a -6.5% return.

Despite a challenging September, the Core Large Cap Equity remained up 26.7%, for the year-to-date period, comfortably ahead of all other categories included in HANDLS Indexes. The Core Fixed Income category was down 1.1% for the year-to-date period, as a surge in interest rates during the month wiped out its gains for the year.

For the income-oriented categories that make up the Nasdaq Dorsey Wright Explore portion of HANDLS Indexes, MLPs took the lead as the top performer with an 18.0% year-to-date return. Another disastrous month for Utilities left the category with a -15.1% return for the year, a shocking decline for a category typically viewed by investors as a safe source of dependable income.

On a year-to-date basis, the Nasdaq 5HANDL Index was up 4.0% through the end of September, versus returns of 3.9% and 3.5% for the Nasdaq 7 HANDL Index and Nasdaq 10 HANDL Index, respectively.

*The graph and table above provide return data for major income-oriented asset categories since inception of HANDLS Indexes (3/12/2009). Returns for each asset category are based on the returns of the constituent(s) in the Nasdaq HANDLS™ Base Index representing that category. Also included are returns for the Nasdaq 5HANDL™ Index, the Nasdaq 7HANDL™ Index and the Nasdaq 10HANDL™ Index.  Inception dates for MLPs (1/2/2013), Build America Bonds (1/2/2010) and Active Fixed Income (1/2/2014).

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