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The Returns of Every Asset Class So Far in 2014

The Returns of Every Asset Class So Far in 2014

The Returns of Every Asset Class So Far in 2014

This all encompassing chart, straight from Deutsche Bank, summarizes the YTD returns up to this week with all major asset classes including stocks, government and corporate bonds, currency markets, gold, and commodities.

From our perspective, there are a few things worth noting.

Firstly, despite the bearish undertones of the market from those investing in precious metals, gold is actually flat on the year. The current sentiment is not really warranted based on actual performance, so this could be an overshoot of negativity that doesn’t reflect market realities. In other words, this could be yet another sign of the bottom.

Next, the chart really shows some of the stories of the year. The USD strength rings loud and clear with all foreign currencies and commodities uniformly dropping. However, nothing has dropped as much as the Russian ruble which is the worst performing asset class of the year.

Russian ruble chart

The strength of the ruble is highly correlated to the price of Brent oil, which is the other poorest performer YTD (-28%). This will continue to be a problem for Putin’s Russia as the breakeven price for Russia’s national budget depends on $102/bbl Brent. With today’s added oil plunge as OPEC producers meet, this will not be remedied anytime soon.

The last note is that the chart also shows returns since the S&P 500 pullback that occurred in September. While most assets are down or flat since that event, the notable exceptions are Indian and Chinese equities, along with industrial metals.

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