A recap of 2021 H1
11 July 2021
What this chart shows This week we reflect on the year-to-date performance of a number of major asset classes. The data runs from 31st December 2020 to 30th June 2021, showing total returns in US dollars. The standout performer in H1 was oil, up +46% to June end, rallying to near its highest price in three years. We don’t show it here as it distorts the chart! Oil prices have pulled back more recently after OPEC+ producers canceled a meeting due to clashes over plans to increase supply to meet rising demand.
The weakest performer over the period was gold, which saw its worst month since November 2016 in June, down 7%. Equities enjoyed a strong start to the year as optimism for a sharp rebound in economic activity grew. Government bonds were more challenged as yields rose, particularly through the first quarter, though the last two months has seen somewhat of a reversal of this trend. Why this chart is relevant Record inflows were added to equity funds in the first half of 2021 helping major indices to climb to a series of record highs through the year to date. The S&P 500 (US) is up more than 15% this year, making it the top-performing developed market. The reflation trade has paused for breath in recent weeks though as fears of the delta variant have escalated. This, and the vaccine rollouts, will continue to have a huge influence on markets over the coming months. As will inflation, employment, and growth data which will be determining the policy responses of central banks.
Source: Bloomberg, Momentum Global Investment Management
Research Date: July 2021
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