Bears on Top: All Major Asset Classes Post Weekly Losses

  • Market Overview

Losses took a toll on markets worldwide, with US stocks and bonds posting the smallest setbacks last week, based on a set of ETFs representing the major asset classes. By contrast, commodity and property shares ex-US took heavy blows in the trading week through Friday’s close (May 12).

A broad measure of investment-grade fixed-income securities fared best. Vanguard Total Bond Market Index Fund ETF Shares (NASDAQ: BND ) ticked lower with a slight 0.2% decline. The ETF continues to trade in a tight range as uncertainty about the debt-ceiling impasse in Washington persists, raising anxiety about the macro implications if House Republicans and President Biden don’t soon find a common political ground.BND Weekly Chart

According to some estimates, the so-called X-date, when the US runs out of money to pay its bills, could arrive in early June. Negotiations are set to resume tomorrow, Tuesday, May 16.

Commodities lost the most ground last week. WisdomTree Continuous Commodity Index Fund (NYSE: GCC ) tumbled 2.8% and closed on Friday near its lowest level in well over a year.

The Global Market Index (GMI.F) fell again last week, slipping 0.6%. This unmanaged benchmark holds all the major asset classes (except cash) in market-value weights via ETFs and represents a competitive measure for multi-asset-class portfolio strategies.

ETF Performance - Weekly Total Returns

The major asset classes post mixed results for the one-year window, with nearly half showing gains. The performance leader over the past year: foreign shares in developed markets ex-US (VEA) via an 11.7% total return. Commodities (GCC) are the loss leader with a near-16% decline.

ETF Performance - Yearly Total Returns

Most of the major asset classes are still nursing relatively deep drawdowns. The deepest: foreign real estate shares ( VNQI ), which ended last week with a -27.7% peak-to-trough decline. Stocks in foreign developed markets ( VEA ) reflect the softest drawdown for the major asset classes: -9.2%.

Drawdown Distribution Histories

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