Recent Investment Returns By Asset Class – September 2012

Here is my monthly update of the trailing total returns for the major asset classes that I find useful. I am using passive ETFs to track asset classes, as they represent “real” investments that you can buy and sell. See August 2012 asset class returns for additional background and comparison.

Asset Class
Representative ETF
Benchmark Index
1-Mo1-Year5-Year10-Year
Broad US Stock Market
Vanguard Total Stock Market (VTI)
MSCI US Broad Market Index
2.58%30.26%1.57%8.73%
Broad International Stock Market
Vanguard Total International Stock (VXUS)
MSCI All Country World ex USA Investable Market Index
1.93%13.58%-4.52%9.44%
Emerging Markets
Vanguard Emerging Markets ETF (VWO)
MSCI Emerging Markets Index
5.32%17.74%-1.7316.58
REIT (Real Estate)
Vanguard REIT ETF (VNQ)
MSCI US REIT Index
-1.84%32.32%2.68%11.42%
Broad US Bond Market
Vanguard Total Bond Market ETF (BND)
Barclays U.S. Aggregate Float Adj. Bond Index
0.09%5.00%6.52%5.31%
US Treasury Bonds – Short-Term
iShares 1-3 Year Treasury Bond ETF (SHY)
Barclays U.S. 1-3 Year Treasury Bond Index
0.02%0.40%2.69%2.69%
US Treasury Bonds – Long-Term
iShares 20+ Year Treasury Bond ETF (TLT)
Barclays U.S. 20+ Year Treasury Bond Index
-2.32%6.10%11.19%7.82%
TIPS / Inflation-Linked Bonds
iShares TIPS Bond ETF (TIP)
Barclays U.S. TIPS Index
0.50%8.87%7.79%n/a
Gold
SPDR Gold Shares (GLD)
Price of Gold Bullion
7.70%9.20%18.57%n/a

Here is a chart of the 1-year trailing returns for the major asset classes above, which I use for rebalancing. Note that I do not necessarily invest in all the listed asset classes, see my personal portfolio for more details.

Looks like nearly all asset classes are up from a year ago. Indeed, the US stock market is up over 30% from a year ago… find a guru or economist that predicted that! Over the past 10 years, the US stock market had an a 8.59% annualized return. The hyped “lost decade” looks a lot different once you simply move your timeframe a few years. The longer I invest, the less I pay attention to short-term market predictions from anyone.

* Listed are total returns (includes dividends and interest) as calculated by Morningstar as of 8/31/12. All periods longer than one year are annualized. NAV returns are listed except in the case of GLD, as there is not a significant premium/discount to NAV for the other ETFs and the NAV returns match the equivalent Vanguard mutual fund returns. In certain cases, I am using the long-term returns of the equivalent Vanguard mutual funds as Vanguard ETFs are simply a different share class of the mutual funds, share the same underlying investments (VXUS/VTIAX, VWO/VEIEX, VNQ/VGLSX, BND/VBLTX).

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