2014 Asset Class returns and Market Performance

Last year’s stock market performance is marked by the continuation of  US broad market outperforming non-US Markets.  The S&P 500 Index returned 13.69% in 2014 and the MSCI World ex US Index returned -3.47%.  Let’s look at how major asset classes and a moderate diversified portfolio performed in the 2014 calendar year. Over the 20 year period, a diversified portfolio continues to provide almost all of the annualized return (8.28%) of a 100% broad stock market portfolio (Russell 3000 annualized return, 9.47%) with less drama.

US Broad Market Stocks

Russell 3000 Index (first full year: 1979)
2014 Return: 12.56%
Best (1995): 36.83%
Worst (2008): -37.31%
S&P 500 Index (1926)
2014 Return: 13.69%
Best (1933): 53.97%
Worst (1931): -43.35%

International Developed Market Stocks
MSCI World ex USA Index (1970)
2014 Return: -3.47%
Best (1986): 65.31%
Worst (2008): -43.56%

Emerging Markets Stocks
MSCI Emerging Markets Index (1988; gross div. used to extend data series)
2014 Return: -1.82%
Best (2009): 79.02%
Worst (2008): -53.18%

US Bonds
Barclays US Aggregate Bond Index (1976)
2014 Return: 5.97%
Best (1982): 32.62%
Worst (1994): -2.91%

2014 Periodic Table of Investment Returns

The 2014 Callan Periodic Table of Investment Returns was recently published. A link to the Periodic Table is here.  BlackRock has a periodic table tool, which supports the creation of customized reports.  I prefer the BlackRock tool because the table includes a Diversified Portfolio. A link to the BlackRock 2014 table is here.  You can also click on the thumbnail image below. The tool has been updated to include historical performance of inflation-protected bond funds (TIPS) for the first time.

Asset Class Returns

BlackRock 2014 Asset Class Returns

 

Moderate Diversified Portfolio
BlackRock 20 Year Annual Periodic Table of Returns (1994)
Comprised of 35% Barclays Aggregate Bond, 10% Russell 2000, 22.5% Russell 1000 Growth, 22.5% Russell 1000 Value, and 10% MSCI EAFE
2014 Return: 8.05%
Best (1995): 27.4%
Worst (2008): -22.8%
1994 to 2014 annualized Return: 8.28%