Vanguard All-World ETF: Payroll Shock Lifts Fund Back to the Brink of Its Record

Nonfarm payrolls rose just 29,000 in September, well below the 90,000 forecast, sending global equities higher and the Vanguard FTSE All-World ETF near its peak.

A disappointing US jobs report proved to be exactly what global markets wanted. Nonfarm payrolls rose by just 29,000 in September, according to Reuters, well short of the 90,000 economists had pencilled in — and the soft reading was enough to send equities broadly higher and pull the Vanguard FTSE All-World UCITS ETF back within a whisker of its all-time peak.

The fund closed Friday at EUR 171.38, a gain of 0.6% on the day, leaving it just 0.2% below the 52-week high of EUR 171.80 it touched during the same session. The advance mirrored the wider tape: global stocks added 0.6%, US shares moved up and European equities recovered, with falling oil prices lending an extra hand to risk appetite.

From Yield Anxiety to Relief

The rally did not emerge from nowhere. Earlier in the week, the mood had been far more cautious. Reuters described global equities as resilient on Wednesday even as government bond yields surged, oil traded above USD 100 a barrel and geopolitical risks simmered. At that point, the world's major equity benchmarks sat roughly 2% below their records but more than 12% higher year to date.

Sentiment began to shift on Thursday, when US stocks clawed back early losses after Treasury yields retreated from multi-year highs. The catalyst was a call for patience from Federal Reserve Vice Chair Philip Jefferson, who — again per Reuters — cautioned against another rate hike. Persistent inflation worries, sturdy economic data and rising crude prices had been weighing on prices before that.

By Friday, the weak employment numbers had accelerated the turn, reinforcing expectations that the Fed will hold off on tightening for now.

September's Yield Squeeze

The fund's net asset value history lays bare how much the bond market had been calling the shots. The NAV slipped from USD 194.5218 on 21 September to USD 191.4309 by 1 October, before recovering to USD 192.5352 a day later — a trajectory that tracked the broad equity market's final September days almost exactly.

Behind that dip was a surge in long-dated yields. Reuters reported that the 10-year US Treasury yield climbed past the 5% mark late in the month, as higher global financing costs, firmer energy prices and fiscal worries fed the view that rates would stay elevated for longer. AP framed the picture similarly: stronger-than-expected US economic data kept yields aloft even as an inflation report came in softer than economists had forecast.

What kept the damage contained was the artificial-intelligence earnings boom, which Reuters credited with underpinning global equities. The yield move acted more as a counterweight than as the trigger for a broad selloff. An earlier mix of AI enthusiasm and hopes for better energy supply from the Middle East had already supported markets, with a falling oil price easing inflation concerns — though elevated bond yields remained a risk factor.

That push-and-pull explains why September's market moves were so uneven before stabilising as the month turned.

A Broad Index, No Shelter From Macro

For a globally diversified index fund holding thousands of securities across developed and emerging markets, such macro currents flow straight into the NAV. Rising rates weigh on equity valuations across every sector and region, and spreading risk across individual names offers no protection against systemic moves in the bond market.

The September episode is a case in point: even a fund as wide-ranging as this one is sensitive to macro shocks. For long-term holders, the drawdown stands as evidence of global equity volatility rather than a fundamental change of direction — the swift rebound into October pointed instead to a temporary shift in risk appetite.

The Longer View

Zoom out and the picture looks considerably brighter. The fund has climbed 24% from its 52-week low of EUR 138.28, set in mid-October 2025, and is up 21% over the past twelve months. Year to date, it has gained 18%.

Those gains follow a third quarter that Reuters characterised as dominated by turbulence in rates, bonds and oil. With the latest payroll data pushing those worries at least temporarily into the background, the question now is how much weight the Federal Reserve gives the weak employment figures when it next sets policy.