MSCI has released its index performance report for January 2018, breaking down the best and worst performing equity indices over this period by country, factor and sector.
Markets were broadly bullish in January with MSCI reporting all country-based and factor-based indices up over the month.
The index and data provider, which is one of the leading providers of equity indices to the ETF industry, reports that all of its country- and factor-based indices generated a positive return in January.
Country indices
For the month of January, China (+12.5%) was the best-performing country index while the worst was France (+1.0%).
The broad market all-world index for January, as represented by the return on the MSCI All Country World Index (ACWI), was up 5.7%.
France (+7.0%) and Germany (+5.9%) also outperformed over the month, while the USA (+5.7%) matched the ACWI’s return.
As measured by forward price-to-earnings (P/E) ratio, the most expensive country (as of month-end) was the USA with a forward P/E of 18.9, and the cheapest was Korea with a forward P/E of 8.9.
China (P/E 14.2), Germany (P/E 13.7), the UK (P/E 14.4), Japan (P/E 14.7) and France (P/E 15.2) are also trading at forward P/E ratios materially below the market average (ACWI) P/E of 16.5.
Factor indices
All factor indices were positive during January, the best-performing being momentum (+7.9%) and the worst, minimum volatility USD (+3.3%). That said, only one other factor index outperformed the ACWI, namely enhanced value (+6.1%).
At current prices, the most expensive factor is minimum volatility USD with a forward P/E of 19.1, while the cheapest is enhanced value with a forward P/E of 9.9.
Sector indices
The best-performing sector index during January was information technology (+7.7%) and the worst was utilities (-0.4%). Consumer discretionary (+7.6%), and financials (+7.1%) also all noticeably outperformed the ACWI over this period, while industrials (+5.7%) and health care (+5.7%) matched the ACWI’s return.
The most expensive sector is currently real estate with a forward P/E of 21.1, and the cheapest is financials with a forward P/E of 12.6. Telecoms (P/E 14.0), utilities (P/E 14.6), and materials (P/E 15.6) are also trading at a forward P/E ratio below the market average ACWI forward P/E of 16.5.