Major Asset Classes - January, 2015 Performance Review

US real estate investment trusts (REITs) remained the performance leader among the major asset classes in the first month of the new year. The MSCI REIT Index climbed a strong 6.8% in January (total return); for the trailing one-year period, US REITs are up a sizzling 33.5%. Meanwhile, January’s biggest loser: foreign high-yield bonds, which tumbled 5.7%, based on the Markit Global ex-US High Yield Index. As for US stocks, the new year arrived with a thud for the formerly soaring asset class: the Russell 3000 Index shed 2.8% last month.

January’s losses weighed on the Global Market Index (GMI), an unmanaged benchmark that holds all the major asset classes in market-value weights. GMI posted a mild setback of 0.8% in the first month of 2015, although for the trailing one-year window the index is still ahead by 5.2%. Nonetheless, the message is loud and clear these days: the diminished risk premia expectations that have been showing up on CapitalSpectator.com lately (see last month’s update, for instance) are looking a bit more prescient.

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