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TIPS and Commodities Led Returns For Asset Classes Last Week

Summary:
Inflation-indexed Treasuries and commodities were the top performers last week for the major asset classes, based on set of exchange traded funds. The iShares TIPS Bond ETF (TIP) rallied for a fourth straight week, gaining 0.8% over the five trading days through Friday, July 16. The gain lifted the fund to a record high. A close runner-up last week: broadly defined commodities. WisdomTree Continuous Commodity Index Fund (GCC), an equal-weighted portfolio, rose 0.6%. The biggest losses last week: US and foreign developed-market stocks, exceeded only by foreign real estate: Vanguard Global ex-U.S. Real Estate ETF (VNQI) slumped 1.8%. Looking at all the major asset classes in one portfolio, an ETF-based version of the Global Market Index (GMI.F) took a hit last week,

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Inflation-indexed Treasuries and commodities were the top performers last week for the major asset classes, based on set of exchange traded funds.

The iShares TIPS Bond ETF (TIP) rallied for a fourth straight week, gaining 0.8% over the five trading days through Friday, July 16. The gain lifted the fund to a record high.

TIPS and Commodities Led Returns For Asset Classes Last Week

A close runner-up last week: broadly defined commodities. WisdomTree Continuous Commodity Index Fund (GCC), an equal-weighted portfolio, rose 0.6%.

The biggest losses last week: US and foreign developed-market stocks, exceeded only by foreign real estate: Vanguard Global ex-U.S. Real Estate ETF (VNQI) slumped 1.8%.

Looking at all the major asset classes in one portfolio, an ETF-based version of the Global Market Index (GMI.F) took a hit last week, falling 1.1%. This unmanaged benchmark (maintained by CapitalSpectator.com) holds all the major asset classes (except cash) in market-value weights via ETF proxies.

TIPS and Commodities Led Returns For Asset Classes Last Week

For trailing one-year return, US real estate investment trusts (REITs) edged into the lead over US stocks. Vanguard US Real Estate (VNQ) is ahead by 40.6% on a total return basis over the past 12 months. That’s slightly ahead of Vanguard Total US Stock Market (VTI), which is up 38.8% for the past year.

US bonds (BND) remain the worst one-year performer for the major asset classes.  Vanguard Total US Bond Market (BND) is down 0.6% for the trailing one-year window.

TIPS and Commodities Led Returns For Asset Classes Last Week

Ranking the major asset classes via current drawdown shows that most of our proxy ETFs currently enjoy peak-to-trough declines of no more than -5%. US inflation-indexed government bonds (TIPS) are the leader on this front via a 0% peak-to-trough decline as of Friday’s close. The main outlier: commodities (GCC), which currently posts a drawdown of -30%-plus.

TIPS and Commodities Led Returns For Asset Classes Last Week

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By James Picerno


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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