Courtesy of Deutsche Bank’s latest latest “house view” report comes this cracking chart that shows the total return of global stocks, bonds, commodities and currencies so far for 2015.
Stocks – again – have had another good year so far, propelled higher in recent weeks on the back of improved investor appetite. Emerging markets are the exception to the rule, down 11%. For those in Australia, not shown in the chart, the ASX 200 total return index – that which includes dividends and stock movements – is currently down 1% year-to-date.
Bond markets – both corporate and sovereign – are trading around the flatline although, courtesy of the ECB’s quantitative easing program, European high yield corporate and sovereign debt has moderately outperformed.
In currency markets it’s been all about the US dollar, returning 10% on the back of expected monetary divergence between the US and other major monetary jurisdictions. At the other end of the spectrum, emerging market currencies have been hammered. The Brazilian real has slumped 30%, near doubling the next worst performer – the Turkish lira – which has fallen 18%. Despite recent strength, the Australian dollar has also lost 13%.
Of note, for all the kerfuffle of the one-off depreciation in the Chinese renminbi in August, over the year the currency has still returned 3%.
Commodities, shown at the far right of the chart and rightfully shown in red, have had a year to forget. Everywhere you look they’ve fallen. Putting the performance of the commodities complex into perspective, gold – only down 10% year-to-date – is the relative outperformer. Enough said.
Then there’s iron ore which, at 38% down, has had such a bad year that its decline barely fits on the scale.
It will be interesting to see how these trends evolve over the next 7 weeks into year end, especially should the US Federal Reserve raise interest rates for the first time since June 2006 in mid-December.
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