This week our team has performed a deep dive into the performance of investment asset classes and returns on a global scale since 2008.

First, we analysed returns by asset class and style from the first quarter of this year, comparing them to each year since 2009. We found that rising bond yields have dominated 2021’s first quarter, along with a value-driven equity market rally. Massive further US fiscal stimulus measures and the success in the roll-out of coronavirus vaccines in the US and the UK have contributed to rising optimism about the global economic outlook. Rising bond yields and higher commodity prices have also helped boost value stocks, while more domestically orientated small cap stocks have been well supported.

Second, upon assessing returns in world equity markets, we found that Japanese stocks have benefitted particularly from a weaker currency this past quarter – while it was European equities, with their higher degree of value characteristics, which outperformed expectations.

Our next metric was returns in the global fixed income market. Recently, fears of increasing inflation on the back of additional stimulus have pushed sovereign yields higher, and it was the riskier end of the fixed income spectrum that outperformed. As real rates moved up, rate-sensitive bond markets suffered, however.

Last but not least, we surveyed the commodities landscape. Overall, in 2021 to date, optimism for economic recovery from the pandemic has continued to support commodities, with oil having grown by 22% and industrial metals 11% year-on-year. Gold, meanwhile, stabilised in March.