Most Major Asset Classes Rallied in July Except Bonds

  • Market Overview

Most of the major asset classes continued to rally in July, led by a surge in commodities based on a set of ETFs. US bonds, by contrast, remained the outlier, posting a third straight monthly loss.

Commodities stole the show in July. The iShares S&P GSCI Commodity-Indexed Trust (NYSE: GSG ) rose 10.8%, well ahead of the rest of the field, delivering its best monthly gain in a year and a half. The fund ended the month at its highest close since January.

GSG Weekly Chart

Most markets around the world rallied in July, including emerging markets stocks ( VWO ), which posted the second-best performance (+5.9%) for the major asset classes. US shares ( VTI ) also participated in last month’s upswing with a solid 3.7% gain.

The odd man out: US bonds ( BND ) struggled in July, again, edging down 0.1%. Despite the recent weakness in US fixed income, all the major asset classes are now posting gains year to date.

Total Returns

The Global Market Index (GMI) kept pace with the widespread advances in July, rising 2.9%. This unmanaged benchmark (maintained by holds all the major asset classes (except cash) in market-value weights and represents a competitive benchmark for multi-asset-class portfolios.

GMI is currently sitting on a strong 14.8% increase year to date – ahead of all its component markets except for US shares (VTI) and foreign developed-markets stocks ( VEA ).

Reviewing GMI’s performance in context with US stocks (VTI) and US bonds (BND) over the past year reflects a bullish run. GMI is up more than 10% over the past 12 months, moderately behind VTI’s 14.1% increase but far ahead of the bond market’s weak 3.2% decline via BND.

GMI vs US Stock and Bond Markets

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