Clean Sweep: All The Major Asset Classes Posted Gains Last Week

Global markets rebounded last week, posting across-the-board gains, based on a set of exchange-traded funds as of Friday, Nov. 6. With the pandemic resurging in the US and Europe, however, the prospects for a sustained, broad-based rally look challenged.

Nonetheless, the trading week begins with a solid performance tailwind. Last week’s leader: equities in foreign developed markets. Vanguard FTSE Developed Markets (VEA) surged 7.6% — the fund’s strongest weekly increase since April. The rally lifted the ETF to its highest close so far in the post-coronavirus-crash rebound.

US (VTI) and emerging markets stocks (VWO) were strong performers last week, too, along with US and foreign property shares (VNQ and VNQI, respectively).

US bonds delivered the weakest performance. Inflation-indexed Treasuries rose fractionally, posting the softest gain for the major asset classes.

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The widespread rallies dispensed a strong increase for the Global Markets Index (GMI.F) last week. This unmanaged benchmark, which holds all the major asset classes (except cash) in market-value weights via ETFs, rose sharply with a 5.6% increase – GMI’s best weekly rise since April.

US equities continue to hold the top spot for the trailing one-year trend. Vanguard Total US Stock Market (VTI) ended trading on Friday with a 16.9% total return vs. the year-ago level (based on trailing 252 trading days).

The weakest one-year performance for the major asset classes: foreign real estate stocks. Vanguard Global ex-U.S. Real Estate (VNQI) is in the red by 12.5% over the past 12 months.

GMI.F, on the other hand, is ahead with a solid 10.4% total return for the trailing one-year period.

Looking at global markets through the lens of current drawdown, broadly defined commodities (GCC) are currently posting the deepest setback within the major asset classes via a 44% peak-to-trough decline as of last week’s close.

Meanwhile, three funds share honors for posting zero drawdowns at the moment: foreign junk bonds (IHY), foreign corporate bonds (PICB) and foreign government bonds in developed markets (BWX).

GMI.F’s current drawdown is also zero.

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