Markets roared back to life last week, rebounding after widespread losses in the previous week. The big winner for the five trading days through Oct. 21: emerging market stocks, which led the rally among a set of proxy ETFs representing the major asset classes. Meanwhile, last week’s losers were limited to fractional losses in foreign corporate bonds and commodities.
Vanguard FTSE Emerging Markets (NYSEARCA:VWO) posted a strong 2.0% total return for the five trading days through Friday, eclipsing the rest of the field by a solid margin. The advance was comfortably above the 1.5% gain for the number-two gainer last week, Vanguard Global ex-US Real Estate (NASDAQ:VNQI).
Broadly defined commodities fell the most last week. The iPath Bloomberg Commodity ETN (NYSEARCA:DJP) dipped slightly, shedding 0.25% – the first weekly setback in five weeks.
Last week’s upside bias lifted an ETF-based version of the Global Markets Index (GMI.F), an investable, unmanaged benchmark that holds all the major asset classes in market-value weights. GMI.F climbed 0.5% for the five trading days through Friday.
In the one-year column, a change of leadership is conspicuous as emerging market bonds and stocks post the strongest returns through Oct. 21. VanEck Vectors J.P. Morgan Emerging Market Local Currency Bond (NYSEARCA:EMLC) currently holds the top spot for trailing one-year results; the ETF is ahead by 10.5% on a total return basis. In close pursuit is Vanguard FTSE Emerging Markets, which is ahead by 10.3% over the past 12 months.
Meantime, commodities remain in last place for the trailing one-year period. DJP is off by a bit more than 3% for the 12 months through Friday.
GMI.F’s one-year performance perked up a bit last week. The benchmark is ahead by 4.2% for the year through Oct. 21.
James Picerno is the owner of the popular finance blog, The CapitalSpectator (www.capitalspectator.com)