U.S. stock market has been persistently in a steady up trend: last week, U.S. total stock market index (VTI, 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 (GLD) was up most, followed by emerging market and developed stock market indices (VWO, EFA). All were up more than 2%. For more performance details, please refer to here. The following table shows the trend scores for major assets. The top three assets are U.S. stocks (VTI), U.S. Equity REITs (VNQ) and commodities (DBC). Fixed income bond ETFs are still ranked at the bottom.
| Assets Class | Symbols | 02/18 Trend Score | 02/11 Trend Score | Direction |
|---|---|---|---|---|
| US Stocks | VTI | 14.82% | 14.32% | ^ |
| US Equity REITs | VNQ | 14.34% | 15.18% | v |
| Commodities | DBC | 13.62% | 13.58% | ^ |
| International REITs | RWX | 11.76% | 9.27% | ^ |
| International Developed Stks | EFA | 10.71% | 9.16% | ^ |
| Gold | GLD | 8.93% | 6.85% | ^ |
| 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% | ^ |
| Treasury Bills | SHV | 0.01% | 0.03% | v |
| Emerging Mkt Bonds | PCY | -0.07% | -0.87% | ^ |
| Total US Bonds | BND | -0.49% | -0.98% | ^ |
| Municipal Bonds | MUB | -1.17% | 0.24% | v |
| Intermediate Treasuries | IEF | -1.33% | -2.13% | ^ |
| 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). Disclosure:
It has been a difficult period for fixed income investors: the total U.S. bond index (BND, AGG) had a negative trend score, ranking below cash or Treasury Bills (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 (PCY). With U.S. dollar index (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 (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.
Symbols:EEM,VNQ,FRN,VWO,IYR,ICF,GLD,RWX,VTI,SPY,IWM,PCY,EMB,JNK,HYG,PHB,EFA,VEU,IEF,TLT,GSG,DBC,DBA,CFT,BWX,MBB,BND,MUB,SHV,AGG,
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