The Callan Periodic Table of Investment Returns From 2000 to 2019: Chart

Callan has updated their popular “The Periodic Table of Investment Returns” with 2019 data. This chart shows the importance for diversification. For instance, U.S. large caps were the top performers in 2019 with a return of over 31%. Emerging markets which used to be hot a few years ago did not have such a great year. Emerging market equities earned just over 18% relative to the spectacular performance of American stocks. It should be noted however Russia was one of the top markets last year. However overall as a group emerging markets simply well underperformed US markets.

Other developed markets also earned lower returns than the US with the Developed excluding the US growing over 22%.

The Callan Periodic Table of Investment Returns From 2000 to 2019:

Click to enlarge

Source:  Callan LLC

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Key Takeaway:

The importance and benefits of diversification cannot be understated. As the chart above shows, an investor overweight in emerging equities would have missed the substantial growth of US equities. Since it is impossible to predict which market and sector will outperform in any given year, the wise move is to allocate one’s assets across a wide range of sectors, countries and asset classes.

Past Callan Charts:

Related ETFs:

  • iShares Dow Jones Select Dividend ETF (DVY)
  • SPDR S&P Dividend ETF (SDY)
  • Vanguard Dividend Appreciation ETF (VIG)
  • SPDR S&P 400 Mid Cap Growth ETF (MDYG)
  • iShares Russell Midcap Index Fund (IWR)
  • iShares MSCI Emerging Markets Indx (EEM)
  • SPDR S&P 500 ETF (SPY)
  • Vanguard MSCI Emerging Markets ETF (VWO)
  • SPDR S&P 500 ETF (SPY)
  • SPDR KBW Bank ETF (KBE)
  • SPDR KBW Regional Banking ETF (KRE)
  • SPDR S&P 500 ETF (SPY)
  • Vanguard Dividend Appreciation ETF (VIG)
  • SPDR S&P Dividend ETF (SDY)
  • SPDR STOXX Europe 50 ETF (FEU)

Disclosure: No Positions

Emerging Markets Returns 2005 Thru 2019: Chart

Emerging market equity returns vary wildly from one country to another. In addition, similar to developed markets, no country is the top performer in consecutive years. One year’s best performer can turn into next year’s worst performer. Novel Investor recently updated his returns chart for emerging markets. The following chart shows the equity returns of single country MSCI indices for emerging markets from 2005 thru 2019:

Click to enlarge

Credit: Novel Investor

Russia was the best performing market in 2019. In 2008, during the global financial crisis it was most negative return at nearly 74%. Last year the situation was reversed with Russia gaining over 53%. While Greece went into tailspin a few years ago in 2019 it was the second highest returning emerging market.

The colorful above chart also shows the importance of diversification. Within emerging markets, it is always wiser to distribute one’s assets across countries to reduce risk and increase potential gains.

Related ETFs:

  • Market Vectors Russia ETF (RSX)
  • iShares MSCI Mexico Capped Investable Market (EWW)
  • iShares FTSE/Xinhua China 25 Index (FXI)
  • The iShares MSCI India ETF  (INDA)
  • iShares MSCI Brazil Index (EWZ)
  • iShares MSCI All Peru Capped Index (EPU)
  • Global X FTSE Colombia 20 ETF (GXG)

Disclosure: No Positions

Latest Dividend Yields by Country: Chart

Dividend yields of equity markets vary across countries significantly. The following chart shows the latest dividend yields for select countries as of December, 2019.

Russia has the highest dividend yield in the world at 6.23% while India has the lowest rate at just 1.19%. Many of key companies in Russia such as those in oil and gas, banking industries are owned by the state and the state encourages them to payout a high portion of their profits as dividends, India is traditionally not known for its dividend culture. Global investors primarily invest there for growth. Among emerging countries, Brazil is also not a big dividend payer. Countries such as Malaysia, Colombia and Chile offer much higher yields than India and others. So those countries are better for income investors.

Among the developed countries, the US has the lowest yield at 1.83%. The yield on the S&P 500 has stayed under 2% for many years if not decades. This is because US firms invest most of their retained earnings in R&D, capital expenditures and others that are geared towards growing the company. Very few firms are interested in sharing most of the profits with shareholders in the form of dividends. Even if they want to payout more than the average yields they prefer stock buybacks as opposed to cash dividends. This is due to a major quirk in the Federal tax  code in that taxes on dividends are charged at the ordinary income tax rates which is high while the tax on capital gains is low. So some if not all investors also are content with this strategy followed by American companies.

Australia is known as one of the top countries for dividends. Dividends are high there due to the concept of franking. Moreover Aussie firms do not have much opportunity for growth and historically have preferred to share the wealth with equity holders in cash dividends.

Click to enlarge

Source: Bespoke

Below are few examples showing the big difference in dividend yields between firms in different countries:

1) US & UK – Utility Sector:
Company: National Grid PLC (NGG)
Current Dividend Yield: 4.97%
Country: UK

Company: Consolidated Edison Inc. (ED)
Current Dividend Yield: 3.34%
Country: US

2)US & Australia – Banking:
Company: Wells Fargo & Company (WFC)
Current Dividend Yield: 2.68%
Country: US

Company: Westpac Banking Corp (WBK)
Current Dividend Yield: 7.11%
Country: Australia

3)India & Chile – Banking:
Company: HDFC Bank Ltd (HDB)
Current Dividend Yield: 0.70%
Country: India

Company: Banco Santander-Chile (BSAC)
Current Dividend Yield: 4.82%
Country: Chile

Note: Dividend yields noted above are as of Jan 3, 2020. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.

Key Takeaway: Country selection is key when looking to invest in foreign countries for income. This is especially important in emerging countries. Non-US developed countries are better for income investors although the net yields received could be lower due to dividend withholding taxes, foreign exchange rate fluctuations and other factors.

Disclosure: Long WBK

Knowledge is Power: Dividend Contribution to S&P 500 Return, Latin America Oasis, Oil Services Stocks Edition

The bull market in US equities in 2019 was one of the best in recent years. However for many folks it did not feel like a bull market because stocks heavily in the last quarter of 2018. In addition, not all sectors participated in the roaring. For instance, energy stocks never recovered to their greatness and continue to struggle. Some of the sectors soared. The PHLX Semiconductor Index shot by over 60% with some US semiconductor stocks such as Cirrus Logic(CRUS), Advanced Micro Devices(AMD), Lam Reseearch(LRCX), etc. more than doubling in their prices.

Among the foreign semiconductor stocks trading on the US markets trading as ADRs the following were notable for their returns:

STMicroelectronics (STM) – 94%

ASML (ASML) – 90%

Semiconductor Manufacturing International (SMI) – 77%

Taiwan Semiconductor Manufacturing (TSM) – 57%

With that said, let’s review some of the interesting articles from around the web:

The Roman Forum, Rome, Italy