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March 2021 in Review

Betsy Pierson, CFA


Hello, this is Betsy Pierson, Chief Investment Officer at Midland Wealth Management. The month of March is complete as well as the first quarter. It’s hard to believe we are a quarter of the way through 2021 and it has been a year since the pandemic started. We have come a long way from the lows last March in the markets and the large cap market strength continued this past month.

The S&P 500 had its best month since November returning 4.4% while the Dow Jones Industrial Average increased 6.6% in that same time period. The laggard in the large cap space this month was the Nasdaq, which is more heavily weighted in the high growth technology market, only returning 0.4%. Following the strong markets since November, small caps, as represented by the Russell 2000, took a breather and returned only 1% but is still up over 12% year to date. The economic recovery story continued to drive the market resulting in value stocks outperforming the large growth companies this month. 

International markets lagged domestic markets this month with large cap developed markets, as represented by the MSCI EAFE, increasing only 2.3%, while emerging markets, as represented by the MSCI Emerging Market Index, declined 1.5%. A stronger dollar, rising interest rates and resurgence of the virus in these markets impacted the returns. 

Once again intermediate- and long-term interest rates continued to climb during the month leading to negative bond returns as represented by the Barclays Aggregate Bond Index. The return this month was -1.25% and is down over 3.25% year to date. The yield curve continued to steepen with the five-year treasury increasing .20% or 20 basis points, while the ten-year increased over 30 basis points. The U.S. economy continues to recover at a faster pace than originally forecasted last year, with the 2021 GDP forecast now in the 5% to 7% growth level. Another round of stimulus, a greater supply of new treasury debt and the fear of inflation due to economic growth and supply chain issues were the primary reasons for the continued steepening of the curve. The short end remains anchored near zero with the FOMC or the Federal Reserve in no hurry to increase interest rates. 

We have seen fairly strong returns year to date across most equity markets and do believe that there is still value in these markets but do expect more volatility going forward as the economy continues to reopen, additional stimulus via infrastructure spending is discussed and companies report earnings. As some have said, the easy money has been made but long-term investors should continue to benefit from an upward moving market.

For a more in-depth review of our outlook and the markets, take a couple minutes and read our most recent quarterly update. It is available at Midland’s website ( under the Wealth tab. Thank you and have a great day. 


Midland Wealth Management is a trade name used by Midland States Bank, its subsidiary Midland Trust Company and its affiliate Midland Financial Advisors, an SEC registered investment advisory firm. Investments are not insured by the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank or any federal government agency, and are subject to risks, including the possible loss of principal.