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Real Estate Rebounds In Mixed Week For Major Asset Classes

By James PicernoMarket OverviewMay 24, 2021 01:13PM ET
www.investing.com/analysis/real-estate-rebounds-in-mixed-week-for-major-asset-classes-200582013
Real Estate Rebounds In Mixed Week For Major Asset Classes
By James Picerno   |  May 24, 2021 01:13PM ET
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Foreign and US property shares rallied last week, posting the strongest gains for the major asset classes, based on a set of exchange traded funds through Friday, May 21.

The top performer: Vanguard Global ex-U.S. Real Estate ETF Shares (NASDAQ:VNQI), which rose 1.0%. The fund is near its pandemic high but has yet to fully recover from the coronavirus crash in March 2020, as shown in the weekly chart below.

VNQI Weekly Chart
VNQI Weekly Chart

A close second-place gainer last week: US real estate investment trusts (REITs). Vanguard Real Estate Index Fund ETF Shares (NYSE:VNQ) rallied 0.8%. The fund has traded at or near record highs in recent weeks.

US stocks lost ground for a second straight week via Vanguard Total Stock Market Index Fund ETF Shares (NYSE:VTI), which slipped 0.3%. Meanwhile, US bonds ticked up 0.1%, although Vanguard Total Bond Market Index Fund ETF Shares (NASDAQ:BND) continues to trade in a tight range after suffering a persistent correction in the first quarter.

The Global Markets Index (GMI.F) posted a slight gain, rising 0.1% last week. This unmanaged benchmark holds all the major asset classes (except cash) in market-value weights via ETF proxies.

ETF Performance Weekly Returns
ETF Performance Weekly Returns

For the one-year trend, foreign stocks in developed markets ex-US are the top performer by a hair. Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE:VEA) is up 47.1% on a total-return basis over the past 12 months, slightly ahead of the second-best one-year performer: US stocks (VTI), which is ahead by 46.7%.

The weakest one-year performer for the major asset classes: US bonds via BND, which has shed 0.7%.

GMI.F is up 32.8% over the past year.

Note that one-year returns for some corners of the global markets are unusually high at the moment because year-ago prices were dramatically depressed due to the coronavirus crash.

Accordingly, trailing one-year results will remain temporarily elevated due to extreme year-over-year comparisons until last year’s markets collapse washes out of the annual results.

ETF Performance Yearly Returns
ETF Performance Yearly Returns

Monitoring funds through a drawdown lens shows that foreign high-yield bonds are the leaders with the smallest peak-to-trough decline for the major asset classes. At last week’s close, VanEck Vectors International High Yield Bond ETF (NYSE:IHY) ticked up to a record high.

The deepest drawdown is still found in broadly defined commodities via WisdomTree Continuous Commodity Index Fund (NYSE:GCC). The ETF, which equally weights a broad basket of commodities, is down 31.0% from its previous high.

GMI.F’s current drawdown is currently -1.2%.

Drawdowns Distribution Histories
Drawdowns Distribution Histories

Real Estate Rebounds In Mixed Week For Major Asset Classes
 

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Real Estate Rebounds In Mixed Week For Major Asset Classes

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