This post contains the usual returns by asset class for this past quarter (by representative ETF), year-to-date, last 12 months, last five years, and last ten years. While there is still no predictive power in this data, I’ll continue to post this quarterly for those of you that are interested.
Last Quarter (7/1/2025 – 9/30/2025)Year-To-Date (1/1/2025 – 9/30/2025)Last 12 months (10/1/2024 – 9/30/2025)Last 5 Years (10/1/2020 – 9/30/2025)Last 10 Years (10/1/2015 – 9/30/2025)
A few notes:
Q3 2025 was another solid quarter for investment returns, with all major asset classes finishing in the green. The quarter was led by Emerging Market Stocks (+10.1%), followed by US Large Caps (+8.1%), US Small Caps (+7.6%), Foreign Developed (+5.6%), Commodities (+4% after a mid-quarter dip), US Real Estate Investment Trusts (REITs) (+3.6%), Emerging Market Bonds (+2.2%), US High-Yield Bonds (+2.1%), US Aggregate Bonds (+2%), and US Short Term Corporate Bonds (+1.7%). During Q3, Congress passed and the president signed the One Big Beautiful Bill (OBBB) Act. More on that here. The Fed also started a new rate cutting cycle with a quarter point cut to 4-4.25% as inflation has eased while the job market has softened a bit. They insist this isn’t a sign of bad things to come, but is instead moving rates back toward neutral from their current, somewhat restrictive level. Markets expect another two quarter-point cuts before the end of the year.
This post contains the usual returns by asset class for this past quarter (by representative ETF), year-to-date, last 12 months, last five years, and last ten years. While there is still no predictive power in this data, I’ll continue to post this quarterly for those of you that are interested.
Last Quarter (4/1/2025 – 6/30/2025)Year-To-Date (1/1/2025 – 6/30/2025)Last 12 Months (7/1/2024 – 6/30/2025)Last 5 Years (7/1/2020 – 6/30/2025)Last 10 Years (7/1/2015 – 6/30/2025)
A few notes:
Q2 2025 experienced a lot of volatility on its way to solid overall returns. The quarter started with President Trump announcing “reciprocal tariffs” on virtually all countries on “Liberation Day”, April 2nd. Markets reacted very poorly, especially US Stocks. My thoughts from early April are here and here. Markets (US Stocks down 11-13% over that first week of April and lots of stress in the US Treasury market) seemed to force the administration’s hand toward de-escalation. A new openness toward negotiation of new trade deals sent markets into recovery mode. Foreign Stocks maintained the outperformance they showed in Q1, but all asset classes rallied, at least somewhat, for the last 12 weeks of the quarter. From best to worst: Foreign Developed Stocks (+13%) as the dollar plunged to a 3+ year low, US Large Caps (+11%), Emerging Market Stocks (+10%), Emerging Market Bonds (+8%), US Small Caps (+7%), High-Yield Bonds (+4%), Short-term Corporate Bonds (+2%), Aggregate US Bonds (+1%), Real Estate Investment Trusts (REITs) (-1%), and Commodities (-4%). REITs struggled toward the end of the quarter on concerns over office REITs in NYC after a self-proclaimed Socialist won the Democratic Primary for mayor. Commodities struggled after a cease-fire between Israel & Iran erased the premium that had settled into energy prices over the previous few weeks. These lower commodity prices, though, helped other assets to rally into the end of the quarter given possibly lower future inflation as a result. Lower inflation gives the Federal Reserve more cover to cut interest rates, which would provide a tailwind for asset prices. Markets are now pricing in about 2 1/2 quarter point cuts (63 basis points) between now and December, which would take Fed Funds down to ~3.75% and savings interest rates down to the low 3% range. Unfortunately for the housing market, this may not translate into lower long-term rates (a requirement for lower mortgage rates) if the Fed follows the forecasted path for the short-term. Q3 will be interesting as we could get our first Fed rate cut of the year and need to follow the progress of the One Big Beautiful Bill through Congress. If it passes, higher deficits are a near certainty and with that will come pressure on long-term interest rates to move higher. There will be lots of tax implications as well, some retroactively effective in 2025. I will post a summary of the key tax provisions if/when the Bill nears passage.
This post contains the usual returns by asset class for this past quarter (by representative ETF), last 12 months, last five years, and last ten years. While there is still no predictive power in this data, I’ll continue to post this quarterly for those of you that are interested.
Last Qtr (1/1/2025 – 3/31/2025)Last 12 Months (4/1/2024 – 3/31/2025)Last 5 Years (4/1/2020 – 3/31/2025)Last 10 Years (4/1/2015 – 3/31/2025
A few notes:
Q1 2025 was a flat-to-slightly-up quarter for most diversified portfolios despite all the news of a slowing US economy and the unknown (but almost definitely negative short-term) impact of tariffs. Diversification really paid off for the US investor. US stocks suffered over the quarter (Large Caps -4.3%, Small Caps -7.3%), but Foreign Stocks, Bonds, and Commodities performed well, offsetting those losses. Commodities (+10%) led the asset classes that we track in this quarterly message, with Foreign Developed Stocks (+6.8%) not far behind. Emerging Markets faired well too, with Emerging Market Local Currency Bonds up 4.3% and Emerging Market Stocks up 2.8%. The Federal Reserve held the Fed Funds rate steady at 4.25-4.5% during Q1, but long-term rates fell on fears of a coming recession and lower rates mean relatively strong performance for bonds. US Aggregate Bonds were up 2.8%, with Short-Term Corporate Bonds up 2% and US High Yield Bonds up 1.2%.
This post contains the usual returns by asset class for this past quarter (by representative ETF), total 2024, last five years, last ten years, and since the covid low (3/23/2020). While there is still no predictive power in this data, I’ll continue to post this quarterly for those of you that are interested.
Last Quarter (10/1/24-12/31/24)Last year (1/1/24-12/31/24)Since Covid Low (3/23/20-12/31/24)Last 5 Years (1/1/20-12/31/24)Last 10 Years (1/1/15-12/31/24)
A few notes:
Q4 2024 was an overall down quarter for most diversified portfolios as international markets struggled post-US election, the US Dollar rallied, and long-term interest rates spiked as the inflation stagnated and the Fed continued to cut overnight rates. US stocks had a solid quarter with Large Caps up 2.5% and Small Caps up 1.7%. All other asset classes that we track for this ongoing post were down though including High-Yield Bonds (-0.1%), Short-Term Corporate Bonds (-0.4%), Commodities (-0.5%), US Aggregate Bonds (-3.1%), Emerging Market Stocks (-5.7%), Emerging Market Bonds (-7.1%), US Real Estate Investment Trusts (-7.7%), and International Developed Stocks (-8.1%).
This post contains the usual returns by asset class for this past quarter (by representative ETF), year-to-date, last 12 months, last five years, last ten years, and since the covid low (3/23/2020). While there is still no predictive power in this data, I’ll continue to post this quarterly for those of you that are interested.
Last Quarter (7/1/24-9/30/24)Year-To-Date (1/1/24-9/30/24)Last 12 Months (10/1/23-9/30/24)Since Covid Low (3/23/20-9/30/24)Last 5 Years (10/1/19-9/30/24)Last 10 Years (10/1/14-9/30/24)
A few notes:
Q3 2024 was a fantastic quarter for financial markets as the US economy chugged along, inflation continued to ease around the world, China launched new stimulus measures to strengthen it’s economy, and the Federal Reserved began a rate cutting cycle with a 50 basis point reduction in the Fed Funds rate. Rather than waiting for severe economic weakness to cut rates, as they have typically done in the past, the Fed decided to cut aggressively and begin to ease up on the brakes they’ve been applying to the economy as a way of fighting inflation. All asset classes that we follow in this quarterly message posted gains, led by Real Estate Investment Trusts (+17%). In the middle of the pack, but still with strong returns, were Emerging Market Stocks (+9.7%), US Small Caps (+9.1%), Emerging Market Bonds (+8.1%), Foreign Developed Stocks (+7.1%), US Large Cap Stocks (+5.8%), US High-Yield Bonds (+5.7%), US Aggregate Bonds (+5.2%), and Short-Term Corporate Bonds (+3.8%). Bringing up the rear were Commodities, still positive at 0.6% despite a pull-back in the energy sector.
This post contains the usual returns by asset class for this past quarter (by representative ETF), year-to-date, last 12 months, last five years, last ten years, and since the covid low (3/23/2020). While there is still no predictive power in this data, I’ll continue to post this quarterly for those of you that are interested.
Last quarter (4/1/24-6/28/24)Year-To-Date (1/1/24-6/28/24)Last 12 Months (7/1/23-6/28/24)Since Covid Low (3/23/20-6/28/24)Last 5 Years (7/1/19-6/28/24)Last 10 Years (7/1/14-6/28/24)
A few notes:
Mixed results across asset classes for Q2 kept most diversified portfolios relatively steady in Q2 2024. Emerging market stocks and US Large Cap (led especially by mega caps in tech/AI) outperformed with 5.2% and 4.4% returns respectively. On the flip side, US Small Caps were down 4.2% for the quarter with only ~38% of the stocks in the Russell 2000 closing higher than they started the quarter. In between the best and the worst were Commodities (+3.1%), US Short-term Corporate Bonds (+0.9%), US High Yield (+0.7%), US Aggregate Bonds (+0.1%), Foreign Developed Stocks (-0.6%), Emerging Market Bonds (-1.6%), and US Real Estate Investment Trusts (-1.9%).
This post contains the usual returns by asset class for this past quarter (by representative ETF), last 12 months, last five years, last ten years, and since the covid low (3/23/2020). While there is still no predictive power in this data, I’ll continue to post this quarterly for those of you that are interested.
Last quarter (1/1/24-3/28/24)Last 12 months (4/1/23-3/28/24)Since COVID Low (3/23/20-3/28/24)Last 5 years (4/1/19-3/28/24)Last 10 Years (4/1/14-3/28/24)
A few notes:
A steadying of inflation at a level higher than the Fed’s 2% target pushed back market expectations for interest rate cuts in the first half of 2024. This led to higher rates across the yield curve in Q1, putting some pressure on bonds. Stocks though, looked through higher interest rates and saw an economy that continues to chug along and defy 7% mortgage rates, higher than acceptable inflation, and a massive debt load. US Large Cap stocks (+10.4%) dominated once again, with seemingly relentless buying led by the big Artificial Intelligence (AI) names like Nvidia. US Small Caps weren’t far behind with a 7.5% gain. International stocks underperformed the US, but still saw good growth for the quarter with Developed countries up 5.4% and Emerging Markets up 1.7%. Commodities saw some strength as well, up 2.3%, and high-yield (junk) bonds were up 1.5% despite rising interest rates, due to their higher interest payments and spread compression vs. other, safer debt like Treasuries. Short-term Corporate Bonds were up 0.6%, fairing better than higher duration bonds as rates rose. Aggregate US Bonds lost 0.7%, Real Estate Investment Trusts were down 1.3% and Emerging Market Local Currency Bonds lost 2.4% for the quarter thanks to higher rates and a stronger dollar.
This post contains the usual returns by asset class for this past quarter (by representative ETF), full year 2023, last five years, last ten years, and since the covid low (3/23/2020). While there is still no predictive power in this data, I’ll continue to post this quarterly for those of you that are interested.
Last Quarter (10/1/23-12/31/23)Last 12 months (1/1/23-12/31/23)Since Covid Low (3/23/20-12/31/23)Last Five Years (1/1/19-12/31/23)Last Ten Years (1/1/14-12/31/23)
A few notes:
The rollercoaster continued in Q4, with fantastic returns across the board (excl. commodities, but that’s probably a good thing and it’s another indicator of disinflation), after an up Q2 and a down Q3. Long-term interest rates pulled back as the Federal Reserve appears to have started their pivot toward rate cutting sometime in 2024. They left the door open for further hikes if inflation roars back, but after consecutive soft monthly inflation reports, the Fed is now forecasting three rate cuts (to 4.5-4.75% Fed Funds) by end of 2024. The benign inflation reports and the pivoting Fed sent stocks and bonds off to the races. REITs ended the quarter up more than 18% as the top performer (though that just puts them into the middle of the pack for 2023 as a whole. US Small Caps were up 13.4% with the seemingly ever-raging Large Caps up 11.6%. Foreign Developed (+11%), Emerging Market Bonds (+8.4%), Emerging Market Stocks (+7.1%), and High-Yield Bonds (+7.1%) round out the aggressive side of portfolios. The conservative side also had great returns with US Aggregate Bonds up 6.6% and US Short-Term Corporate Bonds up 4.1%. Commodities (-5.4%), as mentioned above, were the only sore spot for the quarter, with energy prices dropping as the disinflation narrative took hold. It remains to be seen if the Fed can engineer a soft landing for the economy with inflation falling back toward their 2% goal, but without a spike in unemployment and a recession. High interest rates take their toll on economic growth and they work with the “long and variable lags”, about which, the Fed always reminds us. Stocks seem to believe the soft landing is a lock. Bonds seem to believe disinflation is a lock and the Fed is going to go into easing mode. If they’re both correct, 2024 will likely bring more gains with it. If not, it’s going to get interesting, especially for the more expensive areas of the market like US Large Cap stocks.
PWA Financial Tastings Blog 