The Best/Worst Performing Assets Of 2016

Which assets should you have owned during 2016 to achieve the best returns? Analysts at Source Research, the multi-asset research platform, have crunched the numbers and found that a “neutral” portfolio would have produced the best returns for the year. Source defines its “neutral” portfolio as a static mix of fixed income, equity, real estate and commodities. Individually, all of these assets produced steady returns during the year, although the returns came with a significant amount of volatility.

 

The Best/Worst Performing Assets Of 2016

The S&P 500, for example, touched a low of 1810 on February 11, however, since hitting the low the index climbed by 24% to the end of the year. Meanwhile, gold, which started off the year as being everyone’s favorite asset class, gained 30% through July 11 peaking at $1375. After Donald Trump was elected to the White House, the price of the yellow metal began to slump ending the year with a gain of only 8%.

As most assets recorded a positive performance for 2016, spare a thought for those investing in the UK. Thanks to Brexit, British assets have been amongst the worst performing in the world over the past 12 months. The 16% drop in cable (making it the worst-performing developed market currency during the year) is almost entirely responsible for this poor performance. The MSCI UK index returned 19.2% during 2016 in sterling but 0.0% in dollar terms making it the worst-performing developed market index. The MSCI Europe returned 0.2% for the year (USD), and the MSCI Europe ex-UK gained 0.3%. The MSCI world index returned 8.5% the year (USD). Any owners of UK government bonds or real estate also suffered. UK real estate (as measured by the FTSE REIT index lost 23.3% in dollar terms during 2016 or -8.5% in local currency. The global real estate index gained 4.6% in USD for the period. Meanwhile, the UK 10 year government bond returned -8.4% in dollar terms or +9.3% in local currency. And UK investment grade corporate bonds lost 7.8% in US dollars but added 11.2% in local currency for the year.

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