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Monthly Market Monitor - March 2011

Market Indices1MarchYear-to-Date
S&P 5000.04%+5.92%
MSCI EAFE-2.20%+3.45%
MSCI Emerging Markets+5.90%+2.10%
Barclays US Aggregate Bond+0.06%+0.42%
Barclays Municipal-0.33%+0.51%
Barclays US Corporate High Yield+0.32%+3.88%

1 Morningstar Direct

From start to finish, global equity markets were essentially flat for the month of March, but only after making an impressive recovery from the mid-month lows. The March whirlwind began after the 9.0 magnitude earthquake and tsunami in Japan sparked a global market selloff as investors, amid the uncertainty, sought out the relative safety of fixed income markets. Compounding matters, the geopolitical turmoil in Middle East and North Africa regions intensified during the month, most notably in Libya. However, equity markets quickly stabilized as concerns around the global events eased despite some level of uncertainty remaining in the two troubled regions.t

The U.S. broad market S&P 500 Index ended the month essentially flat in March, returning +0.04%. Six out of ten sectors posted positive returns in the month, with Telecommunications leading the way with a +3.8% gain. The Energy and Healthcare sectors also performed well in the month, each posting +1.0% advances. Sectors that lagged during the month were Financials and Technology, falling -3.0% and -2.6% respectively. The March gains capped the S&P 500 Index’s best first quarter performance since 1998.

Developed non-U.S. equity markets in March posted a negative return of -2.2% as measured by the MSCI EAFE Index, held back by the negative returns in the Asian region—and Japan in particular—as the region struggled with the aftermath of the devastating earthquake and subsequent tsunami. The index however did bounce back significantly late in the month following the big initial selloff. Despite the global challenges in the month, emerging markets posted a surprisingly strong +5.9% return as measured by the MSCI Emerging Markets Index and was the top performing broad asset class in March.

Like U.S. equities, core U.S. bonds were essentially flat for the month of March as well, posting a modest +0.06% gain as measured by the Barclays U.S. Aggregate Bond Index. Municipal bonds gave some of the previous month’s gains back in March and returned -0.3% as measured by the Barclays Municipal Index. However, riskier high yield bonds posted another positive month in March, returning +0.3% as measured by the Barclays US Corporate High Yield Index as the strengthening economic recovery continues to benefit the asset class.


Prepared by:Alex Kaye, CFA, Head of Research, and Richard Anderson, Equity Research Director, Research Department, Cetera Financial Group

The views are those of Alex Kaye, CFA, Head of Research, and Richard Anderson, Equity Research Director, Research Department, Cetera Financial Group, and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

Securities and insurance products are offered by PrimeVest Financial Services, Inc., a registered broker-dealer. Member FINRA/SIPC. PrimeVest Financial Services is unaffiliated with the financial institution where investment services are offered. Investment products are: * Not FDIC/NCUSIF insured * May lose value * Not financial institution guaranteed * Not a deposit * Not insured by any federal government agency.

All economic and performance information is historical and not indicative of future results. The market indices discussed are unmanaged. Investors cannot directly invest in unmanaged indices. Please consult your financial advisor for more information.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability, and differences in accounting standards.