Major Asset Classes Move Into The Red

Major Asset Classes Move Into The Red

After two straight months of across-the-board gains for the major asset classes, red ink returned in June.

Roughly half of asset classes rose and half fell last month. Among the gainers, US real estate investment trusts (REITs) led the way. MSCI US REIT Index rallied 2.7% in June, which marks an impressive run of eight consecutive monthly increases.

Last month’s losers were concentrated in foreign bonds (in unhedged terms). The deepest shade of red ink: foreign government inflation-indexed bonds. The Non-$ FTSE Russell Inflation-Linked Securities Index retreated a steep 2.6% in June. The decline appears to be a degree of payback after the index’s stellar rise in May, which reflected the strongest monthly performance for the major asset classes.

So far in 2021, US REITs and commodities stand out as performance leaders. MSCI US REIT Index is up nearly 22% year to date closely followed by a 21.2% return for the Bloomberg Commodity Index.

US stocks continued to rally last month. The Index jumped 2.5% in June, the fifth straight monthly advance. The rebound in US bonds remained alive last month, too, as the Bloomberg US Aggregate Bond Index rose for a third month.

Total Returns Table

Total Returns Table

The mostly upside trend for risk assets continued to lift the Global Market Index (GMI). This unmanaged benchmark (maintained by, which holds all the major asset classes (except cash) in market-value weights, rose 0.9% in June, the fifth straight monthly increase for the benchmark. Year to date, GMI is up a strong 8.7%.

Comparing GMI to US stocks and bonds shows that global asset allocation remains competitive this year, generating relatively high returns while offering a degree of risk management through broad diversification. GMI’s 28.6% return for the trailing one-year window is far above the essentially flat performance of US bonds over the span. Meantime, GMI’s trailing one-year gain earned nearly two-thirds of the one-year increase for US equities – an impressive run when you consider that GMI passively owns all the world’s major asset classes.

GMI Vs US Stock And Bond Markets Chart

GMI Vs US Stock And Bond Markets Chart

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

Leave a comment

Send a Comment

Your email address will not be published.

Enter text shown below: