INSUBCONTINENT EXCLUSIVE:
By Sam Potter, Eddie van der Walt, and Justina LeeUnless a once-in-a-decade reversal hits, investors are about to book once-in-a-decade
strongest annual performance since 2009
benchmark has climbed 28 per cent
A global stocks gauge is up 23 per cent
A worldwide credit index rose 10 per cent
Emerging-market sovereign dollar bonds added 12 per cent
Even Treasuries and gold, those classic safe havens, advanced about 7 per cent and 15 per cent, respectively
Staying on the sidelines was about the only way to lose -- the greenback has gone nowhere in 12 months.
Yet even as they pop corks in
celebration, traders mapping out their 2020 strategies know the scoreboard only tells half of the story
of 2018 was the setback that allowed the comeback
Put aside the tendency to think in calendar years and consider some of the returns since the end of last September: The S-P 500 is up about
Global stocks climbed less than 7 per cent
Adding those extra three months to the calculation means 50 per cent bigger gains for Treasuries and gold.
The trick of the light is that
the market reversal came with a pivot by major central banks toward easier policy, which coincided with the calendar
For instance, with the S-P 500 already well above many year-end expectations, professional forecasters are giving the least optimistic
Holohan, head of equity strategy at Mediolanum
a similar story, he said, unless a big shift in macro data prompts any move by the Fed.
Elsewhere, the strong performance of
investment-grade credit and emerging-market bonds is broadly similar whether you include the 2018 turmoil or not, which underscores the
stocks-led nature of that rout
Adjusting for the volatility of each asset in 2019, gauges of corporate and developing-nation debt are also among the best-returning.
Thank
demand for duration amid stubbornly low inflation, enduring -- albeit slow -- economic growth, and an era of negative rates that makes it
easier for borrowers to service their debts while sending investors in search of assets with a reasonable yield.
Even allowing for those
types of structural market shifts and the rebound which the 2018 fourth-quarter tumult made possible, the performance across assets this
