2013 Market Performance and Asset Class Returns

Last year’s market performance can be summarized by evoking Charles Dickens.  It was the best of times (for US stocks, Rank 2/35), it was the worst of times (for bonds, Rank 37/38).  For other regions, performance was closer to average historical returns.  Let’s look at how major asset classes and a moderate diversified portfolio performed in the 2013 calendar year.  The rank shown below is the 2013 calendar year rank out of total calendar years available for the index.

US Broad Market Stocks

Russell 3000 Index (first full year: 1979)
2013 Return: 33.55%
Rank: 2/35
Best (1995): 36.83%
Worst (2008): -37.31%
S&P 500 Index (1926)
2013 Return: 32.39%
Rank: 13/88
Best (1933): 53.97%
Worst (1931): -43.35%

International Developed Market Stocks
MSCI World ex USA Index (1970)
2013 Return: 21.03%
Rank: 16/44
Best (1986): 65.31%
Worst (2008): -43.56%

Emerging Markets Stocks
MSCI Emerging Markets Index (1988; gross div. used to extend data series)
2013 Return: -2.27%
Rank: 16/26
Best (2009): 79.02%
Worst (2008): -53.18%

US Bonds
Barclays US Aggregate Bond Index (1976)
2013 Return: -2.02%
Rank: 37/38
Best (1982): 32.62%
Worst (1994): -2.91%

Note the difference in performance and rank between US stocks and US Bonds.  It’s important to consider the role of bonds in a diversified portfolio. Bonds might not be to provide a positive return in every calendar year, but serve as “ballast” to dampen portfolio volatility.

2013 Periodic Table of Investment Returns
The 2013 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 2013 table is here.  You can also click on the thumbnail image below.

Asset Class Returns

Moderate Diversified Portfolio
BlackRock 20 Year Annual Periodic Table of Returns (1994)
Comprised of 40% Barclays Aggregate Bond, 48% Russell 3000, and 12% MSCI EAFE
2013 Return: 18.03%
Rank: 5/20
Best (1995): 26.4%
Worst (2008): -21.02%
1994 to 2013 annualized Return: 8.04%