Returns of the Biggest Large Cap Stocks
April 19, 2022
The Bumpy Road to Average Returns
May 19, 2022
Major Asset Classes
April 2022
Performance Comparison
Introduction
April market volatility was notable. Red ink swept across the monthly results for most asset classes, highlighting the need for active risk management and strategies for capital preservation. Equity and bond markets were down world-wide with few exceptions. Strength in the US dollar remained significant and did little to temper outstanding commodity sector returns. The following analysis provides a visual record of returns across and within the major asset classes. The purpose is to facilitate investor performance benchmarking.
US Equities
For all of April, the Nasdaq shed 13.3% – marking its biggest monthly decline since October 2008. The S&P 500 fell 8.8% for its’ worst months since March 2020. Strength was limited to Consumer Staples, where the defensive sector posted solid gains for both large cap shares (+2.3%) and small cap shares (+0.4%). On a year-to-date (YTD) basis, large cap energy shares (+40.2%) and small cap energy (+35.4%) easily outperformed the S&P 500 index. The hardest hit sectors on a YTD basis include private equity (-27.1%), Communication Services (-24.0%) and the NASDAQ (-21.3%).
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Developed Market Equities
Elsewhere, equity markets for all the developed economies had negative returns. Regardless, the S&P Developed Markets index (-6.8%) outperformed the S&P 500 index by 200 basis points (bps). Meanwhile, on a year-to-date basis, the Developed Market index (-12.2%) is also beating the S&P 500 index by 90 basis points. The best markets in the category include Australia (-1%), The United Kingdom (-2.5%), and Norway(-3.7%).
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Emerging Market Equities
Emerging markets, notably resource rich economies, have easily outperformed the developed markets. The S&P Emerging Market index (-5.9%) outperformed the S&P 500 index by 290 bps and beat the S&P Developed Markets index by 90 bps. At the top of the performance list was Turkey (+7.7%), Saudi Arabia (6.8%), Indonesia (+1.9%) and Qatar (+0.5%). Year to date, the relative performance of the Emerging Market index (-12.7%) has been dragged down by Russia (-81.2%). However, a number of emerging markets are performing admirably, including Saudi Arabia (+23.9%), Turkey (+20.0%), and Qatar (+18.2%) among others.
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Government Bonds
April was the second month where returns were down for all government bond maturities. The US Aggregate Bond Index (-3.95%) lagged behind the Global Aggregate Bond Index (-2.3%), owing to delayed efforts to raise interest rates in many countries when compared to the US. Emerging market Bonds (-7.04%) were particularly hard hit in April. On a year-to-date basis the returns are even worse. US treasury bonds (-19.39%) and US Corporate Bonds (-20.52) have been crushed! The good news: both will offer heavily discounted prices and attractive buying opportunities once a trend reversal is confirmed.
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Corporate & Infrastructure Bonds
Corporate and infrastructure project bonds also suffered in April. The benchmark US Corp Bond 5 -10 Year index (-4.98%) outperformed the S&P 500 index and US treasuries of the same maturity. US and global infrastructure project bonds (-7.07% and -5.74%) have consistently outperformed US equities with prices rising until mid-April when prices dropped 15% from their peak. World infrastructure projects continue to have positive YTD returns and outperform the US project benchmark significantly.
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Commodities
Energy commodity prices have been strongly impacted by rising demand, supply disruptions and geopolitics. April was no exception and the year-to-date cumulative return is spectacular. Gasoline (+106.8%) WTI (+72.8%) and low sulfur diesel (+54.7%) have outpaced price changes in all other commodities. Grains and metals also seen material price inflation. However, precious metals were don in April and remain relatively weak on a year-to date basis.
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Currencies
The US Dollar continued to appreciate in April, negatively impacting all currencies, with the exception of the Turkish Lira (+1.2%). Since January, the Yen (-11.1%) has fallen the most, followed by the Pound (-6.9%) and the Swiss Franc (-4.1%).
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