Australian Stocks – Nominal Total Returns from 1900 to 2023: Chart

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I have written about historical annual returns of the Australian equity markets a few times before. Recently I came across a chart showing the nominal total returns of Australian stocks from 1900 to 2023. According to this chart, the Arithmetic Mean Nominal Total Return was 11.7% per year which is very good. In the past 124 years, Aussie stocks have yielded a positive return 78% of the time. The worst year in terms of decline was in 2008 during the GFC when they crashed by over 40% as shown in the chart below:

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Source: Owen Analytics via Morningstar, Australia

Related ETF:

  • iShares MSCI Australia ETF (EWA)

Disclosure: No Positions

Defense Stocks Outperform The Market in the Long Run

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The defense sector has been one of the big growth sectors for many years now and continues to grow further. The ongoing Russia-Ukraine war, middle-east conflicts and other geo-political risks around the world keep defense companies busy. I came across an article by Arian Neiron at VanEck in which he discussed the benefits of investing in defense stocks.

In the long-term, defense stocks have outperformed the broader market as shown in the chart below:

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Source: A megatrend hiding in plain sight: defence by Arian Neiron, VanEck

He identified the following three reasons for owning stocks from the industry as part of a well-diversified portfolio:

  • Spending by governments toward the sector is increasing.
  • Demand for the sector’s products and services has not historically correlated to the economic cycle.
  • The defence industry has historically been at the forefront of technological development and advancement.

Defense stocks are having another great run so far this year.For instance, American defense giant Lockheed Martin Corporation (LMT) has soared by 27% YTD.

The following are some of the top defense stocks that investors can consider for further research:

  • General Dynamics (GD)
  • Northrop Grumman (NOC)
  • L3Harris Technologies, Inc. (LHX)
  • RTX Corporation (RTX)
  • BAE Systems PLC (BAESY)
  • Ingersoll Rand Inc (IR)

Disclosure: No positions

The EU Has The Best Road Safety Record in the World

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The European Union(EU) has the best road safety record in the world according to the report “The Automobile Industry Pocket Guide 2023/2024” by The European Automobile Manufacturers’ Association(ACEA). Road fatalities per million population in the EU is the lowest in the world at 45. The highest rate is in Africa at 272 followed by Eastern Mediterranean which includes the Middle East. Central and South America has also a high rate at 172 per million people.

On a depressing note, the North American rate (which includes Canada and USA) is awful at about three times the rate of the EU. Though the road network in the US is the best in the world the same cannot be said about its drivers. All types of dangerous driving behavior can be observed on roads in the country from drunk driving to speeding to everything in between. According to NHTSA, an estimated 40,990 Americans died in road accidents in 2023. While safety technology has vastly improved in automobiles, driving has continued to remain worse.

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Source: “The Automobile Industry Pocket Guide 2023/2024, ACEA

According to the above report, though the number of vehicles in the EU has increased since 2010, the number of road fatalities has declined significantly. This proves that other countries have a lot to learn from Europeans.

The EU’s Role in Global Trade: Infographic

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The economy of the EU is comparable to the US. The EU is also one of the largest trade partners in the world. The top trade partners of the EU are the US, UK and China. As expected, China is the largest import source for the EU while the US is the top destination for exports.

The following infographic the Council of the EU and the European Council shows additional facts on the EU’s role in global trade:

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Source: The Council of the EU and the European Council

India’s Sensex Hits Yet Another All-Time Record High

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Indian equity markets reached yet another all-time record high this Friday. The benchmark Sensex index reached a high of 84,694 and ended the day at 84,544 with an year-to-date return of 17%. In the past 5 years, the index has more than doubled. Sensex’s return so far this year puts it among the top four global indices as shown in the chart below. Only the NASDAQ and S&P 500 are ahead of the Sensex.European indices such as the DAX and CAC are lagging the amazing returns of the US and Indian markets.

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Source: India’s Nifty, Sensex outperform most global markets, behind only Wall Street, Reuters

The following chart shows the YTD and 5-year price return of the Sensex:

Year-to-date return:

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5-Year return:

Source: Google Finance

At current levels, the P/E ratio on the Sensex is 23.99 according to Exchange data. Indian stocks are richly valued though the ratio is less than the figure reached in 2021-22. Should the US economy enter a recession, global equities including emerging markets like the Indian market would be adversely impacted.

For additional historical data and charts on Sensex annual returns go here.

Related ETFs and ETNs:

  • WisdomTree India Earnings (EPI)
  • The iShares MSCI India ETF (INDA)
  • PowerShares India (PIN)

Disclosure: No positions