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Agenda

Setting the investment agenda

13.02.2020

Agenda 2020 – Asset Class Quilt of Market Returns

After a dismal 2018, global equity markets roared back to life in 2019 adding some $17 trillion in value over the 12 months. US equities were a standout performer rising almost 30%. Australian equities underperformed rising 24%. After being one of the best performing asset classes in 2018, cash was the worst performer in 2019 with just 1.5%.

Bond markets also had a standout year in 2019 boosted by a blizzard of rate cuts worldwide. In total, there were 157 rate cuts from 67 different central banks in 2019. This was the most significant easing cycle since the global financial crisis. This also helped propel the value of bonds trading with a negative yield to a record $17 trillion during the year.

An important lesson from the asset class quilt is the importance of diversification. As can be seen, every asset class, at some point, has been among the best performers in that year, even cash.

 

Best and worst performing asset classes each year

Enlarge Source: Bloomberg

 

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