Senior economist Stewart Robertson examines the performance of asset classes over one, three, five, 10 and 15 years.
Senior economist Stewart Robertson examines the performance of asset classes over one, three, five, 10 and 15 years.
Summary
- Gold, gilts and cash are best performers over one year
- German Dax, FTSE 250 and gold best performers over three and five years
- Gold, UK house prices, commercial property and FTSE 250 are best performers over ten years
- Commercial property outperforms FTSE100 and FTSE 250 over 10 years
- German Dax outperforms FTSE 100 over five and 10 years
- FTSE 250 is top performer over 15 years
The past 12 months
| Asset class | % Return over 12 months |
| Gold (US$) | 38.9 |
| Index-linked gilts | 9.8 |
| Gilts | 5.8 |
| Cash | 3.1 |
| UK house prices | 2.5 |
| Dax (Germany) | 0.5 |
| UK FTSE 100 | -1.3 |
| S&P (US) | -3.6 |
| UK FTSE 250 | -7.1 |
| Euro Stoxx (Europe) | -8.1 |
| UK commercial property | -9.2 |
| Topix (Japan) | -22.9 |
The past three years
| Asset class | Return over three years |
| Gold (US$) | 29.7 |
| Dax (Germany) | 15.8 |
| UK FTSE 250 | 14.3 |
| Euro Stoxx (Europe) | 10.9 |
| FTSE 100 | 9.4 |
| UK commercial property | 8.2 |
| Index-linked gilts | 7.6 |
| Topix (Japan) | 6.6 |
| UK house prices | 6.0 |
| S&P (US) | 5.4 |
| Gilts | 5.0 |
| Cash | 2.8 |
The past five years
| Asset class | Return over five years |
| FTSE 250 | 23.3 |
| Dax (Germany) | 21.5 |
| Gold (US$) | 21.0 |
| Euro Stoxx (Europe) | 16.4 |
| FTSE 100 | 13.8 |
| S&P (US) | 11.6 |
| UK commercial property | 11.0 |
| Topix (Japan) | 10.5 |
| UK house prices | 9.0 |
| Index-linked gilts | 6.8 |
| Gilts | 4.2 |
| Cash | 2.5 |
The past 10 years
| Asset class | Return over 10 years |
| Gold (US$) | 12.0 |
| UK house prices | 10.9 |
| UK commercial property | 10.8 |
| UK FTSE 250 | 9.8 |
| Index-linked gilts | 7.1 |
| Gilts | 5.9 |
| Euro Stoxx (Europe) | 5.1 |
| S&P (US) | 4.1 |
| Dax (Germany) | 3.7 |
| UK FTSE 100 | 3.2 |
| Cash | 3.0 |
| Topix Japan | 0.3 |
The past 15 years
| Asset class | Return over 15 years |
| FTSE 250 | 11.7 |
| UK commercial property | 11.3 |
| Euro Stoxx (Europe) | 10.6 |
| S&P (US) | 9.6 |
| FTSE 100 | 8.5 |
| Dax (Germany) | 8.4 |
| UK House prices | 8.4 |
| Index-linked gilts | 7.3 |
| Gilts | 7.2 |
| Gold (US$) | 7.1 |
| Topix (Japan) | -0.6 |
| Cash | 3.5 |
"Other metals and agricultural products have also seen rapid price rises. Part of the explanation could be speculation; part is higher demand from developing nations; but part is surely a reflection of worries over competing financial assets.
"Gold retains its position as the best performer over three years while German equities were the best developed stock market performer, generating an average annual return of 15.8%. Corporate Germany has successfully restructured within the Euro area. Germany has always made high-quality capital goods and over the last three years demand for these has risen strongly.
"The best performers over five years have generally been equities, reflecting the fact that February 2003 was close to the low point for stock market after the three-year bear market and build up to the Iraq war. All of the major markets provided double-digit average annual returns, with Germany and UK smaller caps standing out. Gold again performed well and UK property prices - residential and commercial - also provided average returns of about 10% a year.
"UK property (commercial and residential) have done exceptionally well over the last decade with an average annual return of about 11%. Gold comes out on top over this period, although the majority of the gain has been in recent years. Bond returns averaged around 6% to 7% a year, only just beating the 5.1% provided by UK cash."
James Dalby, fund development manager at Norwich Union, said: "Our analysis shows just how different the performance delivered by the various asset classes can be. We know that the market turmoil we have been witnessing in recent times has sensitised most investors to the risks associated with share-based investments. However, we also know that over the long-term such investments do have good potential for growth. The two golden rules for investors are to take a long-term view and to maintain a diversified portfolio at all times."
Note:
Sources: FactSet, Datastream. Figures to February 2008.
House prices are average of HBOS and Nationwide house prices indexes.
Returns for foreign (ie: non-sterling) assets take no account of currency movements.
Cash figures are average of UK savings accounts. Source Morningstar.
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