Nowhere To Hide Last Week

The coronavirus blowback that’s roiling the world cut into every facet of the major asset classes last week, based on a set of exchange traded funds. Another challenging week awaits, as sharp losses in overseas markets and US futures trading (ahead of New York’s open for stocks) on Monday suggest.

As the US braces for more bad news in the days ahead, let’s quickly reassess how the trading week stacks up through Friday, Mar. 13. As the chart below shows, red ink prevailed across the board. The softest setback was in US investment grade bonds. Vanguard Total US Bond Market Index (BND) tumbled 4.8%, a huge setback for this normally slow-moving ETF.

The deepest loss last week: foreign real estate/REITs. Vanguard Global ex-U.S. Real Estate (VNQI) suffered a heavy 16.5% loss.

The Global Market Index (GMI.F) was caught in the selling wave as well. This unmanaged benchmark that holds all the major asset classes (except cash) in market-value weights was crushed under a 9.4% decline last week.

For the one-year trend, only three components of the major asset classes are holding on to gains: US investment-grade bonds, US inflation-linked Treasuries and foreign government bonds in developed markets. Otherwise, red ink prevails.

Vanguard Total US Bond Market Index (BND) is up 7.3% for the trailing one-year window through Friday’s close. Meanwhile, iShares TIPS Bond (TIP) and SPDR Bloomberg Barclays International Treasury Bond (BWX), in second and third places, respectively, are holding on to small gains for the one-year result.

Losses dominate otherwise, all the way down to a 31.2% tumble for broadly defined commodities via iShares S&P GSCI Commodity-Indexed Trust (GSG).

GMI.F is also posting a one-year loss via a 4.1% decline at last week’s close.


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