Of the regular 39 assets in our sample, a very impressive 38 finished with a positive total return in USD terms and 36 did so in local currency terms.
The S&P 500 (+21.8%) ended the year with a positive return in every month – the first time this has ever happened in the 90 years of monthly data.
German Government Bonds, or Bunds were the worst performer out of the 39 assets in local currency terms. This is interesting as there is a perception that Bunds are bullet proof given the lack of supply and extreme ECB QE. However the fact that most of the curve still has a negative yield and that 2017 ended with the German economy growing at an annualised rate of over 4% nominal means that even Bunds couldn’t defy valuation gravity last year.
2017 was the least volatile year on record when one considers the all-time or multi-year lows reached on a number of measures of volatility across asset classes.
The big story has been the relentless rally for equity markets. The S&P 500 (+21.8%) ended the year with a positive return in every month – the first time that has ever happened – while also extending its all-time record high.
The Hang Seng (+40.8% USD terms) also reached an all-time high and tops the list for local currency performance but is pipped in USD terms by the Greek Athex (+44.8% – USD) which takes the top spot following years of sub-par returns. Emerging Market Equities (+37.5%), the Portugal General (+34.5%) and FTSE MIB (+33.4%) round out the top five.
Finally for commodity markets, Copper (+31.7%) was the big outperformer, while Gold (+13.1%) and WTI (+12.5%) prices also rose. Only Corn (-0.4%) failed to finish with a positive total return.
Here is the full breakdown of 2017 asset returns…
… and for reference, here is just the last month of the year:
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