Don’t look now, but the long only Commodity ETF ($GSG) has gone through a 16% swing over the past three months to move all the way up to the top spot on May’s asset class scoreboard. Commodities have gone knocking on death’s door, to establishing a drawdown valley, to leading all asset classes after a big rally in oil. The result is WTI hovering around $50.
Stocks and Bonds are roughly at the same performance YTD, which seems to be a trend over the past year or so, while hedge funds lag both – adding fuel to the, “you don’t need hedge funds fire.” Meanwhile, Managed Futures finds itself bringing up the rear, posting three straight months of losses (coinciding with the sharp upturn in stocks and commodities) coming in even on the year. As commodities just taught us, though – don’t count out the laggard in this game – especially with the Fed hinting at a rate hike in June, an upcoming Brexit vote, and a few countries toying with negative interest rates. Whatever happens, we can assure you the scoreboard won’t look exactly like this when the dust settles.
Source: All ETF performance data from Morningstar.com
Sources: Managed Futures = Newedge CTA Index, Cash = 13 week T-Bill rate,
Bonds = Vanguard Total Bond Market ETF (BND),
Hedge Funds= IQ Hedge Multi-Strategy (QAI)
Commodities = iShares GSCI ETF (GSG);
Real Estate = iShares DJ Real Estate ETF (IYR);
World Stocks = iShares MSCI ACWI ex US Index Fund ETF (ACWX);
US Stocks = SPDR S&P 500 ETF (SPY)