Major Asset Classes | March 2020 | Performance Review

The value of cash as an asset class had its moment in the sun in March as coronavirus blowback cut deeply into markets around the world. Posting the only gain among the major asset classes in last month’s tsunami of losses, the S&P US T-Bill 0-3 Month Index exemplified its role as a port in the storm with a 0.2% gain. Par for the course for cash returns of late, but oh-so-welcome in an otherwise miserable month for risk assets.

Beyond cash, red ink infected every corner of the major asset classes, ranging from the relatively mild 0.6% loss in March for US investment grade bonds (Bloomberg US Aggregate Bond Index) to the deep 21.6 crash in US real estate investment trusts (MSCI REIT Index)–the sector’s biggest monthly decline since the 2008-2009 financial crisis.

In the wake of last month’s thrashing, losses have spread to longer-term windows. For trailing one-year results, for instance, only cash and a select group of bonds are posting gains.

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US stocks certainly took a hit last month: the Russell 3000 Index tumbled 13.8% in March—its deepest monthly slide in a dozen years.

The main question investors are asking: Is it over? Don’t count on it, warns DoubleLine Capital Chief Investment Officer Jeffrey Gundlach. “I think we’re going to get something that resembles that panicky feeling again during the month of April,” he predicts.

As for bottom-fishing for beaten-down assets, Oaktree Capital co-chairman Howard Marks says “things have gotten cheap enough” to start nibbling. “I personally think that securities are low enough to buy a little. Somebody said to me, ‘is this the time to buy?’ I say no, ‘this is a time to buy,’” emphasizing that with uncertainty surging a strong dose of time diversification (don’t concentrate purchases on any one date) is warranted for the simple reason that no one knows where the bottom is.

There was no sign of a bottom last month for the Global Markets Index (GMI), an unmanaged benchmark (maintained by that holds all the major asset classes (except cash) in market-value weights. GMI fell a hefty 10.1% in March—the benchmark’s biggest monthly decline since 2008.

For the trailing one-year return, GMI is down 6.2%, a modestly softer decline vs. US stocks, which fell 9.1% over the past year via the Russell 3000 Index. US bonds, by comparison, are up 8.9% for the year through last month’s close, based on the Bloomberg Aggregate Bond Index.

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