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Asset Class Returns As At 30 June 2014


June was another strong month for returns across the board. Red ink was banished among the major asset classes for the third time this year on a monthly calendar basis. What that meant was that investors are putting their funds to work, finally, this is just a small tide turning, as things stand still way too much liquidity is on the sidelines. Hence we may be surprised for a sustained surge plus higher volatility of course.

The big winner last month: emerging market stocks, which climbed 2.7% on a total return basis in June–the fifth straight monthly gain for this slice of equities. This was a significant trend as funds are finally willing to move to emerging markets equities alongside a pretty solid run in US stocks. If you note the monthly and YTD returns, the run up in emerging market stocks closely mirrors the oil prices.
 
Given the bullish tailwind, it’s no surprise to find that June was kind to the Global Market Index (GMI), an unmanaged benchmark that holds all the major asset classes in market-value weights. GMI posted its fifth straight monthly gain, rising 1.4% in June. For the year so far, GMI is up a solid 5.7 %.

majorassetclass.01jul2014
Even more impressive, GMI’s trailing one-year return is 17%–the highest year-over-year comparison for the benchmark since the mid-way mark in 2011. On a trailing five-year basis, GMI’s 10.9% annualized total return is the most since May 2008. In short, bullish momentum has paid off handsomely. 


Comments

Kevin Wong said…
Certainly, equity markets have been enjoying a strong & steady up trend over this last 5 years or so. Markets will continue to trend up so long as there'sstill many skeptics & bears... When the last buyer has bought, and the last bear had sold!

To savvy & long term investors, it doesn't really matters whether market cycle is on up or down trajectory , they will make money either direction. They often come out even wealthier after every crisis!

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