In a mixed week for performances of the major asset classes, inflation-indexed government bonds ex-US posted the strongest gain, based on a set of ETFs through Friday’s close (Feb. 18).

SPDR FTSE International Government Inflation-Protected Bond ETF (WIP) rose 1.5% last week. The gain marks the fund’s first weekly advance in five weeks. As inflation concerns simmer across the global economy, WIP appears to be benefitting. Nonetheless, it’s still unclear if the ETF’s downside bias in recent months is ending.

Most of the major asset classes posted gains last week. The exceptions: US bonds, foreign stocks in developed markets, US real estate investment trusts, and US equities, which fell the most. Vanguard Total US Stock Market (VTI) slumped 1.6%, reflecting the ETF’s second straight weekly loss.

Geopolitical risk is a factor weighing on risk assets as Ukraine-Russia tensions persist. That headwind is exacerbated by what appears to be slowing economic growth and expectations that global liquidity is set to fade. The Federal Reserve and other central banks are planning to shift to a relatively hawkish policy regime – some have already done so. The Bank of England has raised rates twice in the past several months.

There are still some bullish factors for markets, observes Mohamed El-Erian, president of Queens’ College, Cambridge, and an adviser to Allianz and Gramercy. “Solid corporate earnings and behavioral conditioning of investors tempted to ‘buy the dip’ are still in play. But these are inherently less strong and highly sensitive to the Fed being able to deliver an economic soft-landing.”

The Global Market Index (GMI.F) slipped for a second week. This unmanaged benchmark, which is maintained by CapitalSpectator.com and holds all the major asset classes (except cash) in market-value weights via ETF proxies, fell 0.9%.

For the one-year trend, commodities are still posting the strongest performance for the major asset classes. GCC is up 20.6% over the trailing 12-month period.

The weakest one-year performer: foreign corporate bonds via Invesco International Corporate Bond (PICB), which is down 10.3% since its year-ago close.

GMI.F’s one-year performance is a modest 3.4% gain.

Reviewing markets in terms of drawdown shows that the majority of the major asset classes are currently posting peak-to-trough declines that are deeper than GMI.F’s drawdown, which is -7.4% at the moment.

The smallest drawdown at Friday’s close: inflation-indexed Treasuries via TIP, which has lost a relatively light 4.1% from its previous high.