A hypothetical balanced index portfolio held up well in the first quarter of 2015.
The April 2015 Asset Class Dashboard shows a strong month for Non-U.S. equities – especially Emerging Markets. The divergence in returns may remind investors of the potential power of diversification, and the importance of sticking with asset classes that underperformed in prior periods.
Improved sentiment in Europe helped non-U.S. stocks (Russell Developed ex-U.S. Large Cap Index) outpace U.S. equities (Russell 3000® Index) in February. Other asset classes held their own, too.
The divergence of asset class returns can be a good reminder for investors of the benefits of diversification.
The surprise – and impact – of rising interest rates, falling oil prices and relative strength of the U.S. Dollar in 2014 were good reminders for investors that it can be very difficult to anticipate what is coming next for the markets and economy.
Developed market equities (Russell 3000® Index and Russell Developed ex-U.S. Large Cap Index) and U.S. fixed income (Barclays U.S. Aggregate Bond Index) held up in November 2014 even as central banks in the U.S., Europe and China were making changes to their policies.
October 2014 was a good reminder of the challenges of trying to perfectly anticipate market sell-offs and rebounds.