Major Asset Trends: U.S. Stocks and REITs Strong, International Bonds Worth Considering (VTI, SPY, GLD, VWO, BND, AGG, SHV, PCY, UUP, JNK)
U.S. stock market has been persistently in a steady up trend: last week, U.S. total stock market index [Vanguard Total Stock Market ETF (NYSE:VTI), SPDR S&P 500 ETF (NYSE:SPY)] finally notched up to the first place in our trend ranking among major asset classes. For the week, VTI was up 1.15%. Gold (NYSE:GLD) was up most, followed by emerging market and developed stock market indices [Vanguard Emerging Markets Stock ETF (NYSE:VWO), iShares MSCI EAFE Index (NYSE:EFA)]. All were up more than 2%. For more performance details, please refer to here.
|US Equity REITs||(VNQ)||14.34%||15.18%||v|
|International Developed Stks||(EFA)||10.71%||9.16%||^|
|Emerging Market Stks||(VWO)||7.87%||5.43%||^|
|US High Yield Bonds||(JNK)||5.5%||5.93%||v|
|International Treasury Bonds||(BWX)||2.86%||0.67%||^|
|Frontier Market Stks||(FRN)||2.41%||2.49%||v|
|US Credit Bonds||(CFT)||0.38%||0.28%||^|
|Emerging Mkt Bonds||(PCY)||-0.07%||-0.87%||^|
|Total US Bonds||(BND)||-0.49%||-0.98%||^|
|Mortgage Back Bonds||(MBB)||-1.51%||-2.27%||^|
The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).
It has been a difficult period for fixed income investors: the total U.S. bond index [Vanguard Total Bond Market ETF (NYSE:BND), iShares Barclays Aggregate Bond (NYSE:AGG)] had a negative trend score, ranking below cash or Treasury Bills (NYSE:SHV), though it still registered a 2.18% total return in the past 52 weeks. We have pointed out that to achieve better returns, one should branch out to consider international bonds such as BWX or emerging market bonds (NYSE:PCY). With U.S. dollar index (NYSE:UUP) is again in a downtrend and its weak fundamental, one should consider to include international bonds such as BWX. Last week, BWX was ranked just below U.S. high yield bonds (NYSE:JNK), placed in the second place among fixed income bond ETFs in the above table.
Investors considering to have exposure to international bonds should look at a tactical asset allocation strategy that includes a diversified array of bond index funds. Please refer to this portfolio.
Written By The Staff Of MyPlanIQ.com Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
LTI Systems, Inc. is the operator of MyPlanIQ.com and ValidFi.com. The founders of LTI Systems have extensive technology and business background in computer and semiconductor industries. They have been using the strategies provided by MyPlanIQ for their own personal retirement and taxable investments. The mission of LTI Systems is to make wealth management investment strategies that are used to be only accessible to institutions and high net worth individuals available to private investors with a fraction of flat cost and ease of use. The founders of LTI Systems, investors themselves, take pride in creating such a system and service for investors by taking the perspective from the investor side. They are using the system and the strategies for their own investment and align their interests with their customers.
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