In previous article, we showed the Callan Period Table of Investment Returns. Here is similar chart from Allianz Global Investors. This covers only the years 2000-2010, but includes some different asset classes.
More Fixed Income Categories
The Allianz chart shows 14 different asset classes. It breaks out more fixed income categories into Cash, Short-Term Bonds, Intermediate-Term Bond, Long-Term Bonds, High-Yield Bonds, Emerging Market Bonds and Unhedged Foreign Bonds. Also included are Commodities and Real Estate.
The rest of the categories are for stocks. Surprisingly, the Alianz chart does’t include Emerging Market stocks which had a strong showing the past ten years.
As in the Callan Periodic Table, Small-Cap Growth came in first placewith 29.09% return for 2010 . Real Estate also did particularly well last year, coming in second place with 28.60% return. Real Estate is represented by the Wilshire REIT index. So while REITs did great last year, your house probably lost value! Go figure that one out.
Third place went to Small-Cap Value (24.50%) and fourth was commodities (16.83%) Everyone knows that gold, silver, oil, and food went way up last year. If you don’t think these prices mean much, there have been riots and revolutions in the middle East in part due to high food prices.
At the bottom in 2010 was Cash with only 0.13% return. With the Fed’s Zero Interest Rate Policy (ZIRP), it did not pay to be on the sidelines, sitting in cash. Next up from the bottom was Short-term bonds (2.35%) and Intermediate-Term bonds (6.54%). These did not do so bad considering they are fairly low risk. Long-term bonds, which are Treasuries with more than 10 years until maturity did pretty well at 9.38%, but there was interest rate risk.
But the real fun in these charts is in trying to find the patterns from one year to the next. For instance, in the eleven years from 2000-2011, the most gold medals went to commodities with four first place wins.
The sequence of finishes for commodities was 1 12 1 9 9 1 13 1 9 9 4.
REITs finished first or second in 6 out of 11 years.
The REIT sequence of finishes 2 2 7 4 1 2 1 14 13 5 2.
I’m still looking for the pattern that will predict next year’s rankings. Have fun!