Asset Allocation & Rebalancing Review | 22 May 2013

The great divergence in performance among the major asset classes in 2013 rolls on. US REITs and US equities continue to lead the charge on the upside, pulling further away from the laggards, which are headed on the downside by commodities overall and foreign developed-market government bonds in US dollar terms. The wide array of returns so far this year is dramatic, but it’s not all that different from when we profiled this horse race a month ago. The main revision is that the hefty gains for US REITs and US stocks are even bigger.


Here’s how the numbers stack up according to a set of ETF proxies for this year so far through May 21, 2013:
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For another perspective, imagine that we created an equally weighted portfolio of all the major asset classes at the close of 2012 and allowed the strategy to wander freely, based only on the ebb and flow of market prices. By that rule, here’s how this unmanaged asset allocation compares year to date for 2013:

Finally, here’s a visual summary of how the major asset classes have performed this year in relative terms through May 21, 2013. In the chart below, all the ETF prices have been reset to 100 as of Dec. 31, 2012:

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