LONDON Dec 31 As 2012 draws to a close, global
asset market tallies for the year show it would have been hard
to lose money on the major indices during a bumpy year dominated
by massive monetary support from the world's biggest central
Thanks to a late surge in Chinese and Japanese stock
markets, up 16 and 9 percent respectively in December, Asian
equity at large was one of the best bets of 2012.
MSCI's index of Asian equities excluding Japan, for example,
gained more than 20 percent this year and outperformed many
strategists' favoured trades of investment grade and high-yield
corporate bonds as well as the broader emerging markets
Those December gains in Shanghai and Tokyo may well be a
frontloading of many investors' top picks for 2013, where
Chinese and Japanese stocks feature highly.
However, apart from the retreat in major commodity indices
and yen-sapped Japanese government bonds, most other major asset
classes also ended the year in the black.
Despite a continued tendency for the market to lurch from
"risk on" to "risk off" modes during the year, both the
most-favoured 'safety' trades and some of the bumpier,
white-knuckle rides gained in tandem.
German 10-year bunds returned almost 10 percent and gold was
up 6 percent and yet Spanish 10-year debt gained more than 8
percent and emerging market equities jumped almost 20 percent.
Of the MSCI country equity indices, Germany's more than 30
percent rise in U.S. dollar terms was the standout performance
among major bourses, followed closely by gains of more than 25
percent in Hong Kong and India.
In the MSCI stable of emerging markets, Turkey surged 65
percent in dollar terms - almost double Germany's gains - while
Egypt ended the year up 50 percent despite persistent local
political tension. It is though still well below levels seen at
the end of 2010, before the revolution that toppled Hosni
Mubarak. Poland rose 41 percent, helped by zloty gains on the
dollar of 11 percent.
Morocco's 10 percent loss for 2012 was one of the few
markets left in the red for the year.
You have to get into the more exotic world of frontier
markets to see some big losses emerge, with the likes of Ukraine
and Argentina losing between 40 and 50 percent. That's balanced
out by gains of more than 50 percent in Nigeria and Kenya.
And yet you would have had to return to the battered euro
zone to put all that in the shade. Portuguese 10-year government
bonds returned 80 percent over the course of 2012.
Top equity sectors worldwide were financials and healthcare.
Top commodities were wheat and soybeans whereas coffee, cotton
and sugar were best avoided.
BROAD ASSET SHIFTS 2012:
COUNTRY EQUITY PERFORMANCE:
GOVERNMENT BOND MARKETS:
EMERGING MARKET EQUITIES:
FRONTIER MARKET EQUITIES:
HEDGE FUND STRATEGIES: