Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 441

Morningstar asset class performance, 2021 and historical

The start of a new year is a good time to review portfolio performance and consider long-term settings for a financial future.

This article breaks Morningstar reporting into five tables to show market performance over all time periods to 30 years, as well as measures of risk and drawdowns. The chart on long-term performance shows Australian equities and listed property doing best since 1989. 

Table 1: Asset class performance from 1 month to 30 years

Table 2: Standard deviation (a measure of risk) by asset class

Table 3: Historical 1-year returns

Table 4: Historical 5-year returns

Table 5: Historical drawdown (market falls)

Tables sourced from Morningstar Adviser Research Centre.

Chart

Source: Morningstar Adviser Research Centre.

 

Access data and research on over 40,000 securities through Morningstar Investor, as well as a portfolio manager integrated with Australia’s leading portfolio tracking service, Sharesight. Sign up to a free, four week trial below:


Try Morningstar Investor for free


 

5 Comments
D Ramsay
January 16, 2022

Could we please also get the modal values (i.e. mode = the most common score) into the Historical 1 and 5 -year returns into those tables please as it would give a perspective of how Normalized or Skewed the distribution is.

John
January 14, 2022

The chart included (showing relative performance of asset classes) is in a format that I have long considered poor because it is easily manipulated by merely changing the start date. My other criticism is that there is virtually no investor that has that exact experience.

Instead, I suggest an alternative.

Instead of starting with a dollar investment, some time in the past, instead produce a graph that has today as its end date, with each of the asset classes ending up with $100 invested, and the line of the graph says for each date on the horizontal axis, how much money would need to be invested to end up with the $100.

The highest performing asset class would in this graph be the one with the lowest amount of initial investment. The big advantage of this graph would be that any investor could select a start date, and see how much they needed to invest at that start date, in that asset class to end up with $100 now. You could see what proportion of investment dates (finishing today) would produce negative returns, and what proportion positive (or you could make a good guess along those lines)

Dudley
January 14, 2022

"with each of the asset classes ending up with $100 invested":

Better; then only need to time travel to make guaranteed outcome investments.

Tomorrow's race results are best.

Alexander Stitt
January 15, 2022

Wholeheartedly agree with John, that showing a common end point allows a much better understanding of where past performance differentials have arisen and overcomes the problem in the choice of start date; and I've long though this. A quick look at how different the results would be on the existing chart if the start date was 2006 vs 2009 easily illustrates the point. Maybe such a chart requires a bit more work from the user to comprehend, but is, in effect, just the tables of "past 1 years performance", "past 3 years performance", "past 10 years performance" put into a common chart with all time intervals on display all the way back to the chart start, not just the arbitrary "1 year", "3 year" "10 year" etc. observations.

I suspect Dudley, in his comment, did not fully understand what John was proposing.

Dudley
January 16, 2022

Been presenting semi-log cumulative total value normalised to 1 at current date for years.
More clearly shows relative growth rates.
Does not predict future.

 

Leave a Comment:

     
banner

Most viewed in recent weeks

A tonic for turbulent times: my nine tips for investing

Investing is often portrayed as unapproachably complex. Can it be distilled into nine tips? An economist with 35 years of experience through numerous market cycles and events has given it a shot.

Rival standard for savings and incomes in retirement

A new standard argues the majority of Australians will never achieve the ASFA 'comfortable' level of retirement savings and it amounts to 'fearmongering' by vested interests. If comfortable is aspirational, so be it.

Dalio v Marks is common sense v uncommon sense

Billionaire fund manager standoff: Ray Dalio thinks investing is common sense and markets are simple, while Howard Marks says complex and convoluted 'second-level' thinking is needed for superior returns.

Welcome to Firstlinks Edition 467

Fund manager reports for last financial year are drifting into client mailboxes, and many of the results are disappointing. With some funds giving back their 2021 gains, why did they not reduce their exposure to hot stocks when faced with rising inflation and rates?

  • 21 July 2022

Welcome to Firstlinks Edition 466 with weekend update

Heard the word, cakeism? As in, 'having your cake and eating it too'. The Reserve Bank wants to simultaneously fight inflation by taking away spending power, while not driving the economy into a recession. If you want to help, stop buying stuff.

  • 14 July 2022

Welcome to Firstlinks Edition 465 with weekend update

Many thanks for the thousands of revealing comments in our survey on retirement experiences. We discuss the full results. And with the ASX200 down 10%, the US S&P500 off 20% and bond prices tanking, each investor faces the new financial year deciding whether to sit, sell or invest more.

  • 7 July 2022

Latest Updates

Economy

The paradox of investment cycles

Now we're captivated by inflation and higher rates but only a year ago, investors were certain of the supremacy of US companies, the benign nature of inflation and the remoteness of tighter monetary policy.

Shares

Reporting Season will show cost control and pricing power

Companies have been slow to update guidance and we have yet to see the impact of inflation expectations in earnings and outlooks. Companies need to insulate costs from inflation while enjoying an uptick in revenue.

Shares

The early signals for August company earnings

Weaker share prices may have already discounted some bad news, but cost inflation is creating wide divergences inside and across sectors. Early results show some companies are strong enough to resist sector falls.

Property

The compelling 20-year flight of SYD into private hands

In 2002, the share price of the company that became Sydney Airport (SYD) hit 80 cents from the $2 IPO price. After 20 years of astute investment driving revenue increases, it sold to private hands for $8.75 in 2022.

Investment strategies

Ethical investing responding to some short-term challenges

There are significant differences in the sector weightings of an ethical fund versus an index, and while this has caused some short-term headwinds recently, the tailwinds are expected to blow over the long term.

Investment strategies

If you are new to investing, avoid these 10 common mistakes

Many new investors make common mistakes while learning about markets. Losses are inevitable. Newbies should read more and develop a long-term focus while avoiding big mistakes and not aiming to be brilliant.

Investment strategies

RMBS today: rising rate-linked income with capital preservation

Lenders use Residential Mortgage-Backed Securities to finance mortgages and RMBS are available to retail investors through fund structures. They come with many layers of protection beyond movements in house prices. 

Sponsors

Alliances

© 2022 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.