Stocks In Foreign Developed Markets Led Gainers Last Week

Fat Tails Everywhere? Profiling Extreme Returns: Part II


Shares in foreign developed-market nations topped returns last week for the . After retreating for two weeks, this corner of global equity markets rebounded and led a wide-ranging rally in risk assets for the trading week through Aug. 7, based on a set of exchange-traded funds.

Vanguard FTSE Developed Markets (NYSE:) rose 2.9% last week. The gain marks the fund’s best weekly advance since May. Despite the rally, VEA has been a relative laggard over the past three months compared with the rise in US stocks (NYSE:) and shares in emerging markets (Vanguard FTSE Emerging Markets Index Fund ETF Shares (NYSE:).

Most of the  rose last week. The exception: foreign bonds. The worst performer for the week just passed: foreign inflation-indexed government bonds. After a run of three weekly gains, SPDR FTSE International Government Inflation-Protected Bond (NYSE:) backtracked with a 0.9% loss.

The Global Markets Index (GMI.F) continued to rally last week. This unmanaged benchmark, which holds all the major asset classes (except cash) in market-value weights via ETFs, rose 1.8% — the index’s sixth consecutive weekly gain.

ETFs Weekly Return Chart

ETFs Weekly Return Chart

For the one-year trend, US stocks are again in first place. Vanguard Total Stock Market (NYSE:) ended last week with a 17.6% total return for the trailing 12-month period (252 trading days).

Emerging-market stocks are in second place for the past year via Vanguard FTSE Emerging Markets (NYSE:), which is up 12.2% as of Friday’s close.

Broadly defined commodities remain dead last for the one-year change. Although iShares S&P GSCI Commodity-Indexed Trust (GSG) has rallied in recent weeks, the fund is down 25.1% for the past 12 months.

Meanwhile, GMI.F posted a strong 10.3% total return for the trailing one-year period.

ETFs Yearly Returns Chart

ETFs Yearly Returns Chart

Ranking asset classes based on current drawdown continues to show that eight of the 14 major asset classes are posting fractional current drawdowns. The smallest: a thin 0.1% peak-to-trough decline for a broad measure of investment-grade US bonds via Vanguard Total Bond Market (NASDAQ:). At the opposite extreme: commodities, based on GSG’s steep 69.1% drawdown.

GMI.F’s current drawdown is a slight 0.2% dip below its previous peak at last week’s close.

Current Drawdowns Daily Data

Current Drawdowns Daily Data

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James Picerno


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