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Foreign High Yield Bonds Led Last Week's Mixed Market Results

Mar. 04, 2019 8:59 AM ETIHY, VNQ, VTI, VWO, JNK, DJP
James Picerno profile picture
James Picerno


  • Major asset classes delivered a mix of gains and losses during the week, led by foreign high yield bonds and foreign stocks in developed markets.
  • The biggest setback last week was in US REITs.
  • Emerging market stocks are still posting the biggest 1-year loser for the major asset classes.

The major asset classes delivered a mix of gains and losses last week, led by foreign high yield bonds and foreign stocks in developed markets. Meantime, broadly defined commodities and real estate investment trusts (REITs) in the US posted the biggest losses, based on monitoring markets with a set of exchange-traded funds.

Among the winners, the VanEck Vectors International High Yield Bond ETF (IHY) posted the strongest gain. The ETF rose 0.7% for the trading week through March 1, the third consecutive weekly advance for the fund. At the close on Friday, IHY was at its highest price since last April.

The biggest setback last week was in US REITs. The Vanguard Real Estate ETF (VNQ) slumped 1.6% - the ETF's first weekly decline this year.

Despite the latest drop, REITs are benefitting from the Federal Reserve's recent decision to leave interest rates unchanged. As The Wall Street Journal observes today, the central bank's "dovish tilt this year has been a boon for real estate shares that were pressured by a threat of higher interest rates." Indeed, VNQ is up a strong 12.3% so far in 2019 - the second-best performance year to date for the major asset classes after the 13.2% rise in US stocks via the Vanguard Total Stock Market ETF (VTI).

Meanwhile, an ETF-based version of the Global Markets Index (GMI.F) edged higher last week. This investable, unmanaged benchmark that holds all the major asset classes (except cash) in market value weights rose 0.2% - the benchmark's third straight weekly rise.

Turning to the 1-year return window, US REITs remain far ahead of the rest of the field. VNQ is up a strong 19.3% over the past 12 months on a total return basis - far above the results for the other major asset classes. Consider that the second-best 1-year gain is a

This article was written by

James Picerno profile picture
James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers. Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg Markets, Mutual Funds, Modern Maturity, Investment Advisor, Reuters, and his popular finance blog, The CapitalSpectator. Visit: The Capital Spectator (www.capitalspectator.com)

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