While most major asset classes struggled in May, U.S. stocks managed to eke out small gains, driven by strength in large tech companies.
Past performance is not indicative of future results.
Hedge funds and bonds both posted small losses for the month. Hedge funds returned -0.65% while bonds declined 1.16% according to the data. Despite the monthly weakness, both are still up around 2.5% for the year thanks to their low volatility nature.
Real estate and commodities were hit particularly hard in May. Real estate declined 4.03% on weakness in commercial and residential properties. Commodities suffered large losses across the board, falling 6.23% for the month. For the year, commodities are now down a staggering 12.05%.
World stocks underperformed U.S stocks, falling 3.74% in May. Emerging markets failed to keep pace with strength in U.S. large caps. For the year, world stocks are up a more modest 5.10% compared to a 9.69% gain for U.S. stocks.
The star performer in May was managed futures, returning 2.30% as trend-following strategies benefited from increased volatility. However, managed futures are still down 1.17% year-to-date, struggling to keep up in the bull market environment.
In summary, May showed a divergence between U.S. stocks, which continued to climb the “wall of worry,” and most other asset classes which suffered from concerns over the outlook for global growth and trade tensions.
Past performance is not indicative of future results.
Sources: Managed Futures = SocGen CTA Index,
Cash = US T-Bill 13 week coupon equivalent annual rate/12, with YTD the sum of each month’s value,
Bonds = Vanguard Total Bond Market ETF (NYSEARCA:BND),
Hedge Funds = IQ Hedge Multi-Strategy Tracker ETF (NYSEARCA:QAI)
Commodities = iShares S&P GSCI Commodity-Indexed Trust ETF (NYSEARCA:GSG);
Real Estate = iShares U.S. Real Estate ETF (NYSEARCA:IYR);
World Stocks = iShares MSCI ACWI ex-U.S. ETF (NASDAQ:ACWX);
US Stocks = SPDR S&P 500 ETF (NYSEARCA:SPY)
All ETF performance data from Y Charts