US REITs Led A Global Rally Last Week

Nearly every slice of the major asset classes posted a gain last week, based on a set of exchange traded funds, led by real estate investment trusts (REITs) in the US.

Vanguard Real Estate (VNQ) jumped 2.7% for the trading week through June 4. The gain marks the third weekly advance for the fund, which closed just slightly below a record high.

Most market buckets rose last week too, with one exception: foreign junk bonds. VanEck Vectors International High Yield Bond (IHY) slipped 0.3%, although the ETF remains close to a record close.

Widespread market gains lifted an ETF-based version of the Global Market Index (GMI.F), which increased 0.7% last week. This unmanaged benchmark holds all the major asset classes (except cash) in market-value weights via ETF proxies.

For the trailing one-year window, a broadly defined, equal-weighted measure of commodities led the field. WisdomTree Continuous Commodity Index (GCC) is up 44.8% vs. the year-ago level. In close pursuit: emerging markets stocks via Vanguard FTSE Emerging Markets (VWO), which is the second-best one-year performer.

The weakest performer for the past 12 months: US investment-grade bonds via Vanguard Total Bond Market (BND), which is essentially flat for the past year on a total return basis.

GMI.F is up 28.7% for the trailing one-year window.

Monitoring funds through a drawdown lens shows that several ETFs posted zero peak-to-trough declines at the moment, including US stocks (VTI).

The deepest drawdown is still found in broadly defined commodities via WisdomTree Continuous Commodity Index Fund (GCC). The ETF is down 28.4% from its previous high.

GMI.F’s current drawdown is currently zero after the index closed at a record high on Friday.

Disclosures: None.

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