Monday, March 08, 2010

Asset Class Returns As At end-February 2010

REITs continued to be bought up aggressively as the deep discounts saw many funds taking the plunge to buy for value and recovery. Commercial properties are still a long way off to normalisation but its gratifying to see activity there, and the returns for the past 12 months was nearly 100%.

The trend in February was again one of posting a wide range of results and a shifting pattern of winners and losers on a monthly basis. This isn’t a shock, but more of it is probably coming, meaning that a new set of challenges await for managing asset allocation relative to the trend for much of the past 12 months.

February saw some weakness triggered by the Greece situation. Commodities and US stocks were the only ones posting positive monthly gains. Sovereign debt issues were hit as investors priced in the higher default risk.

I suspect the better performance of REITs and commodities were probably linked to rising yen and dollar carry trades. We can expect more of the same. Other than that, I do not see any strong asset class trends appearing, expect muddling performances from the rest over the next few months.


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