U.S. Property Shares Led Returns For Major Asset Classes
James Picerno | Jan 18, 2021 07:30AM ET
US real estate investment trusts (REITs) remain range-bound but property shares managed to lead the major asset classes last week by a wide margin, based on a set of exchange traded funds at Friday’s close (Jan. 15).
Vanguard Real Estate Index Fund ETF (NYSE:VNQ) popped 1.9% last week, the fund’s strongest weekly gain since mid-November. A solid performance but the gain doesn’t break the ETF out of its trading range that’s prevailed for the past two-and-a-half months, as shown below in the chart of weekly returns.
Overall, the week just passed delivered mixed results for global markets, with a downside bias. The biggest setback was in foreign stocks in developed markets. Vanguard FTSE Developed Markets (NYSE:VEA)) slumped 1.9%, a relatively steep decline for last week’s trading results. Note, however, that the setback looks like noise in the context of VEA’s recent upside trend of late.
The Global Markets Index (GMI.F) retreated last week for the first time this year. This unmanaged benchmark, which holds all the major asset classes (except cash) in market-value weights via ETF proxies, slumped nearly 1%.
For the one-year window, US equities are still leading the major asset classes—by a small margin. Vanguard Total Stock Market Index Fund ETF (NYSE:VTI) closed last week with an 18.8% total return for the past 12 months. A close runner-up performer: shares in emerging markets via Vanguard FTSE Emerging Markets Index Fund ETF (NYSE:VWO)), which is up 16.9% for the trailing 12-month period.
The weakest one-year performers: US and foreign property shares, which are posting the only losses for this time window. Vanguard Real Estate Index Fund ETF (NYSE:VNQ)) and its offshore counterpart Vanguard Global ex-US Real Estate Index Fund ETF (NASDAQ:VNQI)) are down 7.0% and 9.2%, respectively, vs. their year-ago levels after factoring in distributions.
Get The News You Want
GMI.F, by contrast, is up a strong 13.8% over the past year, a solid gain for this multi-asset-class benchmark.
Most of the major asset classes continue to post near-zero drawdowns. The downside outliers: foreign property shares (VNQI), government bonds in emerging markets (EMLC), US REITs (VNQ) and the biggest drawdown at the moment: broadly defined commodities (GCC), which closed on Friday with a 38.8% peak-to-trough decline.
GMI.F’s current drawdown is currently -1.0%.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.