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Major Asset Classes Post Wide Range Of Results For Last Week

Summary:
US junk bonds and several slices of foreign fixed-income markets led a mixed run of returns for the major asset classes last week, based on a set of ETFs through Friday’s close (Dec. 3). The top performer: SPDR Bloomberg Barclays High Yield Bond (JNK), which rose 0.9%. The gain marks the first weekly advance for the fund in four weeks. A variety of foreign-bond buckets posted follow-up performances, starting with investment-grade foreign bonds in non-US markets (PICB). Coming in second and third, respectively: foreign junk bonds (IHY) and government bonds issued by governments in emerging markets (EMLC). Last week’s biggest loser: American equities. Vanguard Total US Stock Market (VTI) tumbled 2.0% — the ETF’s fourth-straight weekly loss. A widely cited economic release that

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US junk bonds and several slices of foreign fixed-income markets led a mixed run of returns for the major asset classes last week, based on a set of ETFs through Friday’s close (Dec. 3).

The top performer: SPDR Bloomberg Barclays High Yield Bond (JNK), which rose 0.9%. The gain marks the first weekly advance for the fund in four weeks.

Major Asset Classes Post Wide Range Of Results For Last Week

A variety of foreign-bond buckets posted follow-up performances, starting with investment-grade foreign bonds in non-US markets (PICB). Coming in second and third, respectively: foreign junk bonds (IHY) and government bonds issued by governments in emerging markets (EMLC).

Last week’s biggest loser: American equities. Vanguard Total US Stock Market (VTI) tumbled 2.0% — the ETF’s fourth-straight weekly loss. A widely cited economic release that triggered selling on Friday: sharply weaker-than-expected growth in US payrolls report in November. “A softer payrolls print pulled the rug beneath risk sentiment,” TD Securities advised in a note to clients.

The risk-off sentiment continued to weigh on the Global Market Index (GMI.F) — an unmanaged benchmark (maintained by CapitalSpectator.com) that holds all the major asset classes (except cash) in market-value weights via ETF proxies. GMI.F fell 1.0% — the index’s fourth straight weekly decline.

Major Asset Classes Post Wide Range Of Results For Last Week

For the one-year trend, US real estate investment trusts continue to lead the major asset classes by a wide margin. US Real Estate (VNQ) is up 31.1% on a total-return basis.

US stocks (VTI) are in second place for the trailing one-year window, posting a 23.6% return.

There’s more red ink for one-year results lately. The biggest decline is currently in emerging-markets government bonds via VanEck Vectors JP Morgan EM Local Currency Bond (EMLC), which is down 9.1% as of last week’s close vs. the year-earlier level (after factoring in distributions).

Meanwhile, GMI.F is up 13.0% over the past year.

Major Asset Classes Post Wide Range Of Results For Last Week

Deeper drawdowns continue to spread across the major asset classes. The smallest peak-to-trough decline as of Friday’s close is currently found in US inflation-indexed Treasuries (TIP), which ended the week at just 0.7% below the previous peak.

Current drawdowns slide rapidly from there, with the majority of ETFs now reporting peak-to-trough declines of roughly -5% or deeper.

Major Asset Classes Post Wide Range Of Results For 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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