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Emerging Markets Stocks And Bonds Rise As US Shares Sink

Summary:
Equities and fixed-income securities in emerging markets took the lead last week, posting the biggest gains among the major asset classes, based on a set of exchange-traded products. Meanwhile, US stocks fell for a second week, the first back-to-back weekly losses in three months, based on Vanguard Total Stock Market (VTI). Last week’s top performer: Vanguard FTSE Emerging Markets (VWO), which rose 1.5%. Bonds in emerging markets were the second-best performer, posting a 1.0% gain. Last week’s increase lifted Van Eck Vectors JP Morgan Emerging Market Local Currency Bond (EMLC) to its highest close in a year-and-a-half. The biggest loser last week: foreign corporate bonds. PowerShares International Corporate Bond Portfolio (PICB) slumped 0.8%, marking the ETF’s first weekly loss in

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Equities and fixed-income securities in emerging markets took the lead last week, posting the biggest gains among the major asset classes, based on a set of exchange-traded products. Meanwhile, US stocks fell for a second week, the first back-to-back weekly losses in three months, based on Vanguard Total Stock Market (VTI).

Last week’s top performer: Vanguard FTSE Emerging Markets (VWO), which rose 1.5%. Bonds in emerging markets were the second-best performer, posting a 1.0% gain. Last week’s increase lifted Van Eck Vectors JP Morgan Emerging Market Local Currency Bond (EMLC) to its highest close in a year-and-a-half.

The biggest loser last week: foreign corporate bonds. PowerShares International Corporate Bond Portfolio (PICB) slumped 0.8%, marking the ETF’s first weekly loss in more than a month.

Emerging Markets Stocks And Bonds Rise As US Shares Sink

In the one-year column, foreign equities in developed markets continue to hold the lead. Vanguard FTSE Developed Markets (VEA) is ahead by 14.7% for the trailing 12-month change, just slightly ahead of the number-two performer: Vanguard FTSE Emerging Markets (VWO).

Broadly defined commodities remain in last place for the one-year return among the major asset classes. iPath Bloomberg Commodity Index Total Return (DJP) is off 4.5% as of last week’s close vs. the year-earlier price.

Emerging Markets Stocks And Bonds Rise As US Shares Sink

Total Returns (%) Ranked by 1-year Performance
1wk ytd 1yr 3yr 5yr
Foreign Stocks Devlp’d Mkts (VEA) 0.4 16.6 14.7 3.2 8.5
Emg Mkt Stocks (VWO) 1.5 21.2 14.4 0.9 3.6
US Stocks (VTI) -0.7 8.7 12.9 8.6 13.6
Foreign Junk Bonds (IHY) 0.0 9.8 8.3 2.7 6.0
US Junk Bonds (JNK) 0.1 4.4 6.5 2.1 4.6
Foreign REITs (VNQI) 0.2 17.5 5.8 3.3 7.4
Emg Mkt Gov’t Bonds (EMLC) 0.9 12.5 4.5 -1.9 -1.0
Foreign Invest-Grade Corp Bonds (PICB) -0.8 11.0 0.3 -1.5 1.9
US Bonds (BND) 0.0 3.2 -0.2 2.6 2.3
US TIPS (TIP) -0.3 1.8 -0.3 0.8 0.4
Foreign Gov’t Inflation-Linked Bonds (WIP) -0.7 9.6 -0.6 -1.8 0.5
Foreign Devlp’d Mkt Gov’t Bonds (BWX) -0.2 9.6 -2.9 -1.3 0.0
US REITs (VNQ) 0.1 1.3 -3.5 6.4 8.8
Commodities (DJP) -0.5 -5.6 -4.5 -14.4 -11.6


Note: 3- and 5-year returns are annualized
Data: Quandl.com

James Picerno
James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers. Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg Markets, Mutual Funds, Modern Maturity, Investment Advisor, Reuters, and his popular finance blog, The CapitalSpectator.

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