The economy kept its momentum in October. US growth reached its fastest pace in a year, inflation edged higher, and oil climbed again as tensions around the Strait of Hormuz flared up. Markets, however, spent the month on a different question: whether the huge sums being spent on artificial intelligence will earn an adequate return.​

That question weighed on the large tech names that have led markets for most of the year, while shares outside the AI theme held up much better. It also brought back something investors had been missing for months, as high-quality government bonds rallied and cushioned portfolios when equities fell. France was the notable exception, a reminder that the quality of the borrower still matters.​

Central banks, meanwhile, chose to wait. The Fed and the ECB both held rates after hiking in September, but with inflation still above target, neither has ruled out another move before year-end.​

For us, October was a reminder of why we stay invested and diversified, with a clear preference for companies and borrowers that can show real returns. We hope the following pages help make sense of a busy month, and we wish you a pleasant read.​