What the chart shows  This week’s chart shows the calendar year returns of nine major asset classes for the last ten years in US dollar terms, giving a clear picture of the volatility within the investment sphere. Asset class fortunes clearly vary each year and there is a number of examples when one year’s star performer may falter the next (see commodities from 2021/22 to 2023), or vice versa, when the class straggler jumps to the front (see US high yield bonds from 2015 to 2016). We can see that no single asset class stays a winner forever – a notion the US equity market has been challe ..read more

What the chart shows  This chart shows the inverse of the yield on a 10-year Treasury Inflation Protected Security (TIPS)1 against the US Dollar denominated price of gold per troy ounce since 2000. The chart highlights how historically the 10-year TIPS yield, that is a real yield or net of inflation, has had a close inverse relationship with the price of gold. This correlation has been relatively consistent because higher real yields on bonds diminish the attractiveness of non-interest yielding assets, such as gold, typically used as a defensive asset and as an inflation hedge. Recently h ..read more

What does the chart show? This chart shows the quarterly inflows of Foreign Direct Investment (FDI) into China since 1998. FDI is a component of a country’s Balance of Payments, representing investments made by foreign entities that involve a lasting interest and a level of control in the host country. This facilitates a country’s economic development by fostering the diffusion of technologies, job creation and the transfer of skills, thereby stimulating growth and enhancing global competitiveness. The chart highlights how the latest figure indicates net inflows turning negative for the first ..read more

What does the chart show?   This week’s chart shows the exchange rate of the Japanese yen against the US dollar (showing JPY per 1 USD). This highlights how the yen has depreciated to its lowest closing level against the dollar since 1990. The yen has also been the worst performer amongst all major currencies in 2023, returning -13.67% so far. This weakening is primarily a result of wide rate differentials relative to the US where treasury yields increased by over 100 basis points year-to-date. This occurs when investors seek higher yields abroad causing the yen to be sold in exchange for ..read more

What does the chart show?   This chart shows the cumulative returns over the past three years of main India, China, Emerging Markets and US equity indices. The trends reveal how, amidst a challenging macro environment with economies recovering from the pandemic and withstanding high interest rates, India has performed best. What is also striking is India’s performance in comparison to Emerging Markets in particular China, who have been dealing with cyclical and structural challenges, including a property crisis, high debts, dwindling consumer sentiment and geopolitical tensions. In contra ..read more

What does the chart show?   This chart shows the difference in 30-day volatility between the iShares 20+ Year Treasury Bond ETF (Exchange Traded Fund) and the SPDR S&P 500 Trust ETF. ETFs are funds traded on stock exchanges and typically hold a range of holdings in a specific asset class with the aim of tracking their overall price movements. In the chart we can see the volatility spread between bond and equity ETFs reaching its highest ever positive level indicating that long term treasuries are at their most volatile in relation to equities. Typically, we would expect to see lower l ..read more

What does the chart show?   This chart shows the yields on treasuries reaching their highest levels since the Global Financial Crisis, fuelled by dramatic sell offs in the past couple weeks. US government-issued debt securities are typically regarded as safe-haven assets with reliable returns, however in recent years this has not been the case. In the past couple of years, central banks have responded to inflationary pressures with an unprecedented series of rate hikes, leading to a dramatic surge in yields. Yields move inversely with prices, so these yield spikes have coincided with stee ..read more

What does the chart show?   This chart shows the discounts of specialist or alternative asset (Association of Investment Companies property, private equity, and infrastructure) investment trusts’ share price to their Net Asset Value (NAV) since 2015. NAV represents the total underlying value of all fund assets per share. Investors gain exposure to these assets by purchasing shares of these investment trusts traded on the stock market, leaving the share price susceptible to the same supply and demand dynamics as traditional stocks, resulting in prices fluctuating either above (premium) or ..read more

What does the chart show?   This chart shows a comparison between the trends in year-on-year Consumer Price Index (CPI) from 1966-1980 and 2013-2023, highlighting the striking similarity in the two periods. Not only are the trends eerily reminiscent of the 1970s, but many of the challenges central banks have been faced with are also alike. The pandemic and Russia’s invasion of Ukraine bear resemblances to the Yom Kippur War in 1973, as in both instances exogenous shocks caused widespread supply constraints and subsequent inflationary pressures. The chart also illustrates how after an init ..read more

What does the chart show? This chart shows the amount raised in the top ten Initial Public Offerings (IPOs) in the US over the past five years and the share price performance since the date of their listing. An IPO is a process by which privately owned companies raise capital, offering shares of their company to the public through listing their shares on an exchange. This can be a very challenging and time-consuming process for companies to undertake and leaves their business subject to the intense scrutiny of investors. IPOs are very volatile, risky investments and performance mostly disappo ..read more