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Major Asset Classes: December 2020 Performance Review

James Picerno profile picture
James Picerno


  • With the exception of broadly defined commodities and US and foreign property shares, global markets posted solid gains last year.
  • US stocks were the top 2020 performers, with the Russell 3000 Index surging 20.9% last year.
  • US REITs saw the deepest loss for the major asset classes in 2020.

The year just passed left deep scars on humanity and the global economy, but there were few signs of trouble in the 2020 returns for the major asset classes. With the exception of broadly defined commodities and US and foreign property shares, global markets posted solid gains last year.

The top 2020 performer: US stocks. The Russell 3000 Index surged 20.9% last year. A close second: equities in emerging markets. The MSCI Emerging Markets Index added 18.3% for the 12 months through December 31.

The deepest 2020 loss for the major asset classes: US real estate investment trusts (REITs). The MSCI US REIT Index shed 7.6% last year, even after factoring in the sector's relatively rich distributions.

For the monthly profile, December was kind to all corners, led by a sizzling 7.4% advance in emerging markets stocks. The smallest gain last month: a fractional 1 basis point uptick for cash via the S&P US T-Bill 0-3 Month Index.

The bullish tailwind in beta risk last year gave cover to conventional portfolio strategies with a long-only bias. Drawing on mostly across-the-board gains in 2020, it was hard to lose money, bordering on impossible. As a measure of the upside bias, the Global Market Index (GMI) posted a strong total return last year. This unmanaged benchmark (maintained by CapitalSpectator.com), which holds all the major asset classes (except cash) in market value weights, rose 14.4% in 2020 on a total return basis.

For context, the US stock market (Russell 3000 Index) climbed nearly 21% last year vs. a 7.5% total return for US investment grade bonds (Bloomberg US Aggregate Bond Index). GMI's 14.4% rise in 2020, by comparison, was middling.

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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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Comments (3)

Lake OZ boater profile picture
Disclaimer: Past perform is not indicative of future performance.

Respectfully, commodities is too broad. Need to look under the hood there....

Those of us with specific allocations under that umbrella enjoyed a nice year in 2020.


Classic Precious Metals

Gold : +24% (IAU)

Silver: +46% (SIVR)

Classic metals miners:

Gold: +24% (RING)

Silver: +53% (SLVP)

Rare Earth / Strategic Metals: +59% (REMX)

Source: Finviz.com

Oh, and 2020 had its share of "return free risk" articles (and commenters) at SA on treasury bonds. For the "nattering nabobs of negativity," L-T treasuries did OK (again).

L-T treasuries

TLT: +15%

EDV: +20%

Source: Finviz.com

"You are never adequately diversified unless you have some holdings that make you uncomfortable." Peter L. Bernstein
I am glad I am long only. Wouldn't pay to short Tesla or Bitcoin, no matter what you think lol. The only ones who lost probably panicked at the bottom and never got back in, or bought/sold the wrong stuff at the wrong time.
Lake OZ boater profile picture
The trend is your friend (until it bends in the end).
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