Inflation-indexed Treasuries and commodities were the top performers last week for the major asset classes, based on a set of exchange traded funds.
The iShares TIPS Bond ETF (NYSE:TIP) rallied for a fourth straight week, gaining 0.8% over the five trading days through Friday, July 16. The gain lifted the fund to a record high.
A close runner-up last week: broadly defined commodities. WisdomTree Continuous Commodity Index Fund (NYSE:GCC), an equal-weighted portfolio, rose 0.6%.
The biggest losses last week: US and foreign developed-market stocks, exceeded only by foreign real estate: Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares (NASDAQ:VNQI) slumped 1.8%.
Looking at all the major asset classes in one portfolio, an ETF-based version of the Global Market Index (GMI.F) took a hit last week, falling 1.1%. This unmanaged benchmark (maintained by CapitalSpectator.com) holds all the major asset classes (except cash) in market-value weights via ETF proxies.
For trailing one-year return, US real estate investment trusts (REITs) edged into the lead over US stocks. Vanguard Real Estate Index Fund ETF Shares (NYSE:VNQ) is ahead by 40.6% on a total return basis over the past 12 months. That’s slightly ahead of Vanguard Total Stock Market Index Fund ETF Shares (NYSE:VTI), which is up 38.8% for the past year.
US bonds remain the worst one-year performer for the major asset classes. Vanguard Total Bond Market Index Fund ETF Shares (NASDAQ:BND) is down 0.6% for the trailing one-year window.
Ranking the major asset classes via current drawdown shows that most of our proxy ETFs currently enjoy peak-to-trough declines of no more than -5%. US inflation-indexed government bonds (TIP) are the leader on this front via a 0% peak-to-trough decline as of Friday’s close. The main outlier: commodities (GCC), which currently posts a drawdown of -30%-plus.
