US junk bonds and several slices of foreign fixed-income markets led a mixed run of returns for the major asset classes last week, based on a set of ETFs through Friday’s close (Dec. 3).
The top performer: SPDR® Bloomberg Barclays High Yield Bond ETF (NYSE:JNK), which rose 0.9%. The gain marks the first weekly advance for the fund in four weeks.
A variety of foreign-bond buckets posted follow-up performances, starting with investment-grade foreign bonds in non-US markets via Invesco International Corporate Bond ETF (NYSE:PICB). Coming in second and third, respectively: foreign junk bonds, via VanEck International High Yield Bond ETF (NYSE:IHY), and government bonds issued by governments in emerging markets, via VanEck J.P. Morgan EM Local Currency Bond ETF (NYSE:EMLC).
Last week’s biggest loser: American equities. Vanguard Total Stock Market Index Fund ETF Shares (NYSE:VTI) tumbled 2.0%—the ETF’s fourth-straight weekly loss. A widely cited economic release that triggered selling on Friday: sharply weaker-than-expected growth in US payrolls report in November. “A softer payrolls print pulled the rug beneath risk sentiment,” TD Securities advised in a note to clients.
The risk-off sentiment continued to weigh on the Global Market Index (GMI.F) — an unmanaged benchmark (maintained by CapitalSpectator.com) that holds all the major asset classes (except cash) in market-value weights via ETF proxies. GMI.F fell 1.0%—the index’s fourth straight weekly decline.
For the one-year trend, US real estate investment trusts continue to lead the major asset classes by a wide margin. US Real Estate (VNQ) is up 31.1% on a total-return basis.
US stocks (VTI) are in second place for the trailing one-year window, posting a 23.6% return.
There’s more red ink for one-year results lately. The biggest decline is currently in emerging-markets government bonds via VanEck Vectors JP Morgan EM Local Currency Bond (EMLC), which is down 9.1% as of last week’s close vs. the year-earlier level (after factoring in distributions).
Meanwhile, GMI.F is up 13.0% over the past year.
Deeper drawdowns continue to spread across the major asset classes. The smallest peak-to-trough decline as of Friday’s close is currently found in US inflation-indexed Treasuries, via iShares TIPS Bond ETF (NYSE:TIP), which ended the week at just 0.7% below the previous peak.
Current drawdowns slide rapidly from there, with the majority of ETFs now reporting peak-to-trough declines of roughly -5% or deeper.
