My view on what's going on in the financial markets and the global economy, and a few other things that might interest me from time to time.

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  • tim@emorningcoffee.com

2019 was not just about equities

Updated: Jul 19, 2020

It is well known by now that the equity markets in the U.S. were the right place to be in 2019, with returns YtD of 21.7%, 27.1% and 32.0% for the Dow, S&P 500 and the NASDAQ, respectively. And to be fair, the equity markets in Europe, the U.K. and Japan (and many other places) also have had decent returns this year - 13.5% for the FTSE 100, 24.5% for the STOXX Europe 600 and 21.9% for the Nikkei 225.  However, the reality is that returns in the major global equity markets have been so good this year that they have overshadowed some other well-performing assets / asset classes / investment strategies, including those mentioned in this article published on Christmas day in #financialtimes - see “Top trades: the winning market bets of 2019”:


Sterling: second best performing currency of the year versus the USD; up over 8% since its autumn pre-election lows, and a positive return for the year.


Austria “century bond” (100-year 2.1% bond due 2017): There is a lot of issuer-side debate these days on 50- and 100-year bonds, but had you invested in the then-controversial 100-year bond from Austria in 2017, you would have made a killing (up 50% YtD, and was up 87% in late August prior to the recovery in Euro bond yields in the autumn).


Greek bonds (any / all of them): Greece could not finance itself in the capital markets at any price in 2012. However, investors eventually sniffed a recovery as things stabilised and Greece returned to the capital markets. Bond investors profited handsomely from taking down Greek risk, with investors that bought bonds in 2015 at the worst of the political crisis tripling their money since then. Returns this year alone on the 10-year Greek sovereign bond have been 23%.


Momentum funds / momentum investing: This is an investment strategy in which investors (normally hedge funds) by stocks / asset classes that are trending up. Several so-called momentum funds discussed in this article have generated returns this year of between 20% and 35%.


MarketAxess: This is the largest electronic global bond trading platform, and as the article mentions, has outperformed both Apple and Amazon the last five years. Returns YtD on the shares have been around 75%, triple the US equity returns, for this electronic platform that has “disrupted” conventional human bond trading.


Palladium: Has a higher price / ounce than gold, currently at around $1,900 / ounce. Return YtD has been nearly 57%

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