June 30, 2014 / 9:26 AM / 3 years ago

RPT-GRAPHIC-Peripheral bonds, frontier stocks top first-half investment league

(Repeats, without changes, story first published on Friday)

LONDON, June 26 (Reuters) - Frontier stocks and bonds from the euro zone’s weaker government debtors yielded 20-30 percent returns in the first six months of 2014, while Chinese shares and copper languished at the bottom of the investment leagues.

Tentative economic improvements and support from the European Central Bank has buoyed relatively high-yielding peripheral debt this year, with Greek and Portuguese 10-year bonds returning 27 and 23 percent respectively, outgunning German and U.S. counterparts, according to the following graphic on global asset performance in dollars:


For a graphic on government bond returns click:


While gains in the second quarter slowed versus the first three months of 2014, peripheral markets also benefited from the ECB move to cut deposit rates into negative territory in order to yank the euro bloc away from deflation.

Frontier stocks from African or Middle Eastern markets were also the best performers in the second quarter of 2014, building on the first quarter’s 7.2 percent gain. These markets tend to be less correlated with broader world markets.

The Reuters-Jefferies CRB commodity index, made up of 19 key commodities, is up more than 11 percent.

Gold is up 9 percent after a 28 percent fall last year but the lion’s share of the gains came in the first quarter when the Russia-Ukraine tensions brought in safe-haven buying.

The hunt for yield has supported emerging debt, with the EMBI Global index of sovereign dollar bonds up just over 9 percent while local debt has yielded 5.6 percent.

However, concerns over China have weighed on sectors geared towards the world’s second biggest economy while Shanghai-listed shares have lost 6 percent so far this year. Copper is down more than 5 percent though it has recovered after losing around 10 percent in the first quarter.

One of the top investments of 2013, Tokyo’s Nikkei is down around 2 percent this year, though it gained 5.7 percent on the quarter. The yen is down over 3 percent to the greenback. (Reporting by Sujata Rao; Editing by Ruth Pitchford)

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