The global market index fell 1.7% last week (through June 23), marking the first decline for this multi-asset class benchmark since the last week of May.
Stocks in Europe and Asia are moderately lower in today’s trading following the failed coup in Russia over the weekend. Energy prices are higher after the unrest that briefly threatened President Putin.
“The immediate challenge to Putin’s regime seems to have receded”, to write RBC Capital Markets analysts in a June 25 note. “However, the risk of further civil unrest in Russia must now factor into our oil analysis for the second half of the year.”
US bonds won last week the major asset classes, if only marginally, based on a set of ETF proxies. Inflation-linked US Treasuries led the way via iShares TIPS Bond (TIP), which rose 0.1%. Although the fund has seen slight gains over the past couple of weeks, the TIP continues to trade within a tight range that has prevailed for the past few months.
US real estate investment trusts posted the biggest drop in the past week. The Vanguard Real Estate Index Fund (VNQ) lost 4.5%. The selloff suggests that the VNQ bear market is likely to continue.
The global market index (GMI.F) lost ground last week, falling 1.7%, the first decline in four weeks. This unmanaged benchmark holds all major asset classes (except cash) in market value weightings through ETFs and represents a competitive metric for multi-asset class portfolio strategies.
For the one-year trend, US equities (VTI) continue to hold the lead. The Vanguard Total Stock Market Index Fund (VTI) is up nearly 17% from the prior year level, on a total return basis. Commodities (GCC) are the worst performers, posting a loss of almost 14%.
Most major asset classes are still posting relatively large losses. Biggest peak-to-trough decline right now: Foreign real estate stocks (VNQI) are reporting a nearly 30% decline at Friday’s close.
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