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April 20, 2016

Emerging Market Equities Popped Last Week

Foreign stocks posted strong gains last week (in unhedged US dollar terms), with emerging-market equities in the lead. In close pursuit:  stocks in developed markets ex-US. Meantime, bonds suffered over the five trading days through Apr. 15, with foreign corporates posting the biggest decline among the major asset classes, based on a set of proxy ETFs. 
Vanguard FTSE Emerging Markets (VWO) led markets higher last week with a 3.7% total return. The week’s biggest loser: PowerShares International Corporate Bond (PICB), which slipped 0.6%.
The upside bias in assets last week lifted an ETF-based version of the Global Markets Index (GMI.F), an investable, unmanaged benchmark that holds all the major asset classes in market-value weights. GMI.F advanced 1.4% for the week through Apr. 15.

The one-year-return ledger, however, shows a clear downside bias via returns through last week. Broadly define commodities (DJP) are still the biggest loser via a roughly 24% loss for the past 12 months. Meantime, US real estate investment trusts continue to hold the top spot for trailing one-year return. Vanguard REIT (VNQ) is ahead by more than 6% on a total return basis over the past year.

Note, however, that there’s still a negative wind blowing for assets generally for the one-year period. GMI.F continues to post modestly negative results vs. the year-earlier level and is currently off by 2.3%.
About the Author - James Picerno is a veteran financial journalist since the early 1990s at Bloomberg, Dow Jones, etc. before becoming an independent writer/analyst/consultant in 2008. James is also the author of Dynamic Asset Allocation (Bloomberg Financial, 2010) and he writes at The Capital Speculator(Author Archive here)
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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