Q1 2020 Returns By Asset Class

For the last several quarters, I’ve posted returns by asset class (by representative ETF), as well as last twelve months, last five years, and since the financial crisis lows of 3/9/2009. While there is still no predictive power in this data, I updated those charts as of the end of Q1 2020 for those of you that are interested.  Charts shown in the link below, with each on a separate page, legend at the bottom, zoom to your liking):

2020Q1 Asset Class Performance

Given all the recent blog posts explaining what’s going on, I’ll provide limited commentary on this.  What started as a fairly positive quarter turned ugly at the end of February and downright brutal across risky asset classes in March.  A few notes:

  • Bonds (many of which are now backed by the Federal Reserve’s purchasing power) acted as dampeners of the poor returns, as expected.  The more aggressive your portfolio, the more stocks and less bonds you have, the more magnified negative returns are for Q1.  The aggregate bond index was up 2% for the quarter while short-term corporate bonds were down about 2% due to the slightly worse, but still investment grade, credit quality of corporate bonds vs. treasuries.
  • Junk bonds and emerging market bonds outperformed equities, but still took a beating in Q1 (-12% and -16% respectively).
  • US Large Cap stocks continued to outperform small caps and foreign stocks.  But while the relative performance was better, the overall returns were still -20%.
  • US Small Cap stocks were the worst performers (-30%) and that was after a spectacular final week of the quarter.  Some portions of the Small Cap world (not shown) were even worse.  Micro Cap stocks (-35%+), US Small Cap Value (-40%+) (not shown).
  • Foreign Developed and Emerging Markets took it on the chin as well, down ~24% each.
  • Commodities in aggregate were down ~30%, but energy had it’s worst quarter of all time after Saudi Arabia & Russia decided to start a price war, pumping extra supply into the middle of the covid-19 global economic shutdown.  Energy as a whole (via Vanguard’s Energy ETF) was down 53% while Oil & Gas Equipment & Services were down a whopping 72% in Q1 alone.

 

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