Nearly every slice of the major asset classes retreated in the trading week through Friday, Sept. 10, based on a set of ETFs. The upside exception: US inflation-indexed Treasuries.
The iShares TIPS Bond ETF (NYSE:TIP) rose 0.4% last week, providing a rare bit of upside action in an otherwise down week for markets around the world. Nonetheless, TIP appears to be churning in a range after a strong rise earlier in the year.
Otherwise, losses dominated. The biggest decline last week for the major asset classes: US real estate investment trusts (REITs). Vanguard Real Estate Index Fund ETF Shares (NYSE:VNQ) fell a hefty 4.1%, reversing the previous week’s surge.
A benchmark portfolio that holds all the major asset classes retreated last week. The Global Market Index (GMI.F) fell 1.3%, marking the first weekly decline in three weeks. This unmanaged benchmark (maintained by CapitalSpectator.com) holds all the major asset classes (except cash) in market-value weights via ETF proxies.
Reviewing asset classes via the one-year window continues to show US stocks in the lead. Vanguard Total Stock Market Index Fund ETF Shares (NYSE:VTI) ended the week with a 38.1% total return.
VTI’s leading one-year performance is just slightly ahead of the 36.7% total return for Vanguard Real Estate (VNQ), the second-strongest gainer over the past 12 months.
The weakest one-year performance for the major asset classes: foreign government bonds in developed markets (in US dollar terms) via SPDR® Bloomberg Barclays International Treasury Bond ETF (NYSE:BWX), which is down a fractional 0.3%.
GMI.F’s one-year performance: a strong 25.1%.
Looking at the major asset classes in terms of the current drawdown continues to show most markets with little or no declines relative to the previous peaks. The main exceptions: commodities via WisdomTree Continuous Commodity Index Fund (NYSE:GCC) and stocks and bonds in emerging markets—VanEck J.P. Morgan EM Local Currency Bond ETF (NYSE:EMLC) and Vanguard FTSE Emerging Markets Index Fund ETF Shares (NYSE:VWO), respectively.
GMI.F’s current drawdown is a mild -1.3%.
