Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Vanguard Australia

  •   9 August 2023
  •      
  •   

Vanguard 2023 Index Chart: History proves markets have always risen in the long run

Melbourne, 9 August 2023: Vanguard today launched its 22nd annual Index Chart plotting the performance of major asset classes over the last 30 years, affirming that despite significant downturns, markets typically trend upwards over time.

Over the last 30 years, Australian shares on average have returned 9.2% per annum despite market events such as Russia’s invasion of Ukraine in 2022, the COVID-19 outbreak in 2019, and the Great Financial Crisis in 2007. 

This financial year, Australian shares returned 14.8%, a marked improvement on the previous year when the same asset class returned -7.4%.

All other asset classes in FY23 also saw positive returns, a reversal since FY22 when all returns were in negative territory.

The best performing asset class this year was U.S. shares, returning 23.5% in the period between 1 July 2022 to 30 June 2023. Last year, U.S. shares returned -2.4%.

Australian bonds also made a notable recovery, recording 1.2% this year compared to -10.5% in FY22.

Conversely, cash was the best performing asset class last year with 0.1%. This year, cash was the second lowest returning asset class with 2.9%.

“Vanguard’s annual Index Chart puts into perspective the importance of approaching investing with a long-term mindset,” said Balaji Gopal, Head of Financial Adviser Services at Vanguard Australia.

“While investors shouldn’t rely on past performance, 30 years of market history has proved that the impact of geopolitical, economic and social events on performance is usually short-lived, and markets will typically recover and rise over time.

“Looking back over the last few decades, bear markets on average last only 0.9 years and are generally followed by a bull market, averaging 6.5 years. Investors who stay invested through downturns are therefore best poised to benefit when markets inevitably bounce back”.

“Although volatility smooths out in the long run, markets are unpredictable in the short run. The best performing asset class one year is not guaranteed to be the best the following year, and vice versa.

“Take bonds for example – last year, fixed income markets were caught in a perfect storm of surging inflation, rate hikes, and an unusual correlation with equities. This year however, return expectations for bonds have significantly improved, and yields and spreads have stabilised. Investors are again realising the diversification and income benefits bonds can provide as they begin to bounce back.

“This is why diversifying across asset classes – and making sure you have both growth (such as equities) and defensive components (such as bonds) in a portfolio – is the most effective way to mitigate market uncertainty”.

The power of indexing

Also illustrated in the chart is how an initial investment of $10,000 invested in broad Australian shares in 1993 would have grown to nearly $138,800 today, an average of 9.2% per cent return per annum. The same $10,000 in U.S. shares would have grown to $176,200, returning 10 per cent per annum.

$10,000 invested in 1993

Accumulated investment value at 30 June 2023*

% returns per annum

Australian Shares

$138,778

9.2%

U.S. Shares

$176,155

10.0%

International Shares

$87,584

7.5%

Australian Bonds

$49,394

5.5%

Australian Listed Property

$83,326

7.3%

Cash

$34,737

4.2%

*with no acquisition costs or taxes, and all income reinvested

“Investing in the broad market via index funds or ETFs can produce powerful returns for investors over time if they give their investments the opportunity to grow,” said Mr Gopal.

“Additionally, by combining a mix of asset classes and adjusting that allocation as they age, investors can balance their risk and returns at every stage of their life to achieve their financial goals – from building their wealth all the way through to preserving their savings in retirement.

“It’s the same philosophy that underpins our Vanguard Super Lifecycle offer; let the market work for you by investing broadly, diversifying, and staying the course”.

---

Each year, Vanguard's index chart is downloaded and used by thousands of financial advisers and individual investors as an educational resource providing a clear picture of the long-term market growth across all major asset classes.

To view the Vanguard 2023 Index Chart online, please see here.

 

banner

Most viewed in recent weeks

Which generation had it toughest?

Each generation believes its economic challenges were uniquely tough - but what does the data say? A closer look reveals a more nuanced, complex story behind the generational hardship debate. 

100 Aussies: seven charts on who earns, pays, and owns

The Labor government is talking up tax reform to lift Australia’s ailing economic growth. Before any changes are made, it’s important to know who pays tax, who owns assets, and how much people have in their super for retirement.

The best way to get rich and retire early

This goes through the different options including shares, property and business ownership and declares a winner, as well as outlining the mindset needed to earn enough to never have to work again.

A perfect storm for housing affordability in Australia

Everyone has a theory as to why housing in Australia is so expensive. There are a lot of different factors at play, from skewed migration patterns to banking trends and housing's status as a national obsession.

Chinese steel - building a Sydney Harbour Bridge every 10 minutes

China's steel production, equivalent to building one Sydney Harbour Bridge every 10 minutes, has driven Australia's economic growth. With China's slowdown, what does this mean for Australia's economy and investments?

Supercharging the ‘4% rule’ to ensure a richer retirement

The creator of the 4% rule for retirement withdrawals, Bill Bengen, has written a new book outlining fresh strategies to outlive your money, including holding fewer stocks in early retirement before increasing allocations.

Latest Updates

Economy

The ‘priced out generation’ and what they should do about it

A fiery interview on housing exposed deep generational divides, sparking youth outrage and political backlash. As homeownership drifts out of reach, young Australians face a choice: fight the system - or redefine success.

Taxation

Maybe it’s time to consider taxing the family home

Australia could unlock smarter investment and greater equity by reforming housing tax concessions. Rethinking exemptions on the family home could benefit most Australians, especially renters and owners of modest homes.

Superannuation

Meg on SMSFs: Ageing and its financial challenges

Ageing SMSF members can face issues funding their pension income as cash reserves dwindle. Potential solutions include involving adult children in contributions to secure future financial stability.

Economy

US earnings season was almost too good to be true

The second quarter US earnings season has wrapped up, with a record 82% of S&P 500 firms beating earnings estimates. As tailwinds fade, Q3 may reveal whether AI momentum can offset rising economic headwinds. 

Gold

Does gold still deserve a place in a diversified portfolio?

9,000 years and no devaluations later, gold is the world’s most enduring store of value. It remains attractive as the value of several paper currencies, including the US dollar, are threatened by deficits and rising debt.

Shares

Checking in on the equity market's silent engine

Consumer spending directly impacts corporate earnings, sector performance and market sentiment. The latest data from different economies uncover risks and pockets of opportunity for investors.

Fixed interest

6 key themes driving bond markets

The Fed could soon be prompted to join other central banks in cutting interest rates. This would have ripple effects across global fixed income markets and provide an especially attractive backdrop for emerging market bonds.

Sponsors

Alliances

© 2025 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. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. 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.