Asset Class Annual Total Returns From 2007 To 2021: Chart

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Diversification among asset classes is one of the key factors that investors ought to follow for success with investing in stocks. It is never a wise idea to put all money into one type of asset – whether it is growth stocks or value stocks or real estate or bonds. Assets of different types perform differently every year and it is impossible to predict which one will be top performer. The following chart illustrates this theory.

In 2021, REITs were the best performer with a total return of over 41%. This is much higher than the S&P 500’s 28.7%. Small caps had an average return. Emerging market equities were the worst with a loss of over 2%.

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Source: Novel Investor

Related ETFs:

  • SPDR S&P 500 ETF (SPY)
  • iShares MSCI Germany Index Fund (EWG)
  • iShares MSCI Canada Index Fund (EWC)
  • Vanguard Total Bond Market ETF (BND)
  • iShares TIPS Bond ETF (TIP)
  • iShares MSCI Emerging Markets ETF (EEM)
  • iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)

Disclosure: No positions

The Callan Periodic Table of Investment Returns 2002 To 2021

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The latest edition of The Periodic Table of Investment Returns for the period 2002 to 2021 has been published by Callan. This popular and widely-followed chart shows the annual returns of 9 asset classes ranked from best to worst for each calendar year. In 2021, the best performing asset class was large cap US equities followed by Real Estate and small cap stocks.

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Source: Callan

Download The Callan Periodic Table of Investment Return in pdf format:

The Case for Bonds: Chart

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Fixed income is an important asset class to own in a well diversified portfolio. Though bonds do not offer the thrill of stocks and potential high returns, they provide stability and earn a decent income during good times and bad. For instance, in a prolonged bear market for equities even dividends can get suspended or reduced. Bonds will provide a consistent source of income during such periods without interruptions. When equity markets become volatile investors try to seek shelter in bonds and other relatively safe assets. The following chart from PIMCO shows the diversification benefits of owing bonds:

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Source: PIMCO

Related ETFs:

  • iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)
  • iShares TIPS Bond ETF (TIP)
  • Vanguard Total Bond Market ETF (BND)
  • iShares Core Total U.S. Bond Market ETF (HYG)
  • SPDR® Barclays High Yield Bond ETF (JNK)

Disclosure: No positions

The Periodic Table of Commodity Returns 2021: Chart

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Commodities had one of the best years last year in recent history. The dramatic recovery in crude oil prices led to crude ending the year with a 55% gain. Natural gas was up about 47%. The best performing commodity was coal with a return of over 160%. Despite the rising popularity of renewables coal is still the king in some countries including Germany. Gold ended the year with a loss of about 4%.

The following chart shows the annual returns of select commodities from 2012 to 2021:

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Source: U.S. Global Investors

For an interactive version of the above chart go here.

The Top Three Producers of Clean Energy Metals

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The world is transitioning to clean energy at a rapid pace. Many countries are planning to reduce their carbon footprint. As the transition to a newer world gains traction the demand for clean energy commodities would go up. The traditional fossil fuel-based automobiles are increasingly replaced by electric vehicles. Coal powered electric power plants are getting shutdown and replaced by renewable energy produced from sources such as solar or wind. The commodities needed for the transition to clean energy are concentrated in a handful of countries.

The chart below shows the top three producers of clean energy metals – Copper, Nickel, Cobalt, Rare Earths and Lithium.  Chile is the world’s largest copper producer but the country just recently elected a leftist leader. Similarly the Democratic Republic of Congo is the top producer for cobalt. Australia is a top lithium producer but 70% of the world’s Lithium reserves are found in the Lithium Triangle formed in an area at the intersection of Chile, Bolivia and Argentina.

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Source: 2021 IN CHARTS, Mirabaud Asset Management