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2021 was a great year for energy stocks and large-cap stocks. In 2020 small-cap stocks dominated.
Which asset class will dominate this year?
So what is the best asset class in 2022?
The best returning asset class in 2022 is: Energy with a 39% return so far for the year.
What is the return of all the other asset classes for 2022?
We track 61 asset classes which is a lot more than the usual overview of asset classes. We are inspired by William Bernstein who favors many asset classes.
Below you can see how other asset classes have performed in 2022.
Portfolio data was last updated on 11th of November 2022, 11:40 ET
|Total US Market||-25.74||25.67||21.03|
|Large Cap Value||-15.24||26.51||2.26|
|Large Cap Blend (S&P 500)||-24.95||28.78||18.29|
|Large Cap Growth||-34.39||27.34||40.22|
|Mid Cap Value||-18.51||28.76||-4.13|
|Mid Cap Blend||-20.74||24.71||13.58|
|Mid Cap Growth||-24.22||18.68||22.44|
|Small Cap Value||-18.58||30.63||2.79|
|Small Cap Blend||-21.44||26.74||11.47|
|Small Cap Growth||-25.71||22.37||19.22|
|Long Term Treasury||-32.28||-4.6||18.15|
|Intermediate Term Treasury||-12.65||-2.64||7.71|
|Short Term Treasury||-5.1||-0.6||3.04|
|Total Bond Market||-16.57||-1.86||7.71|
|Short Term Govt/Corp Bond||-9.06||-0.63||5.13|
|T-bills/Treasury Money Market||0.05||-0.1||0.4|
|Inter. Term Corporate Bond||-23.66||-1.84||10.97|
|Health Care Sector||-13.48||26.04||13.34|
|Precious Metals Sector||-8.84||-9.6||29.52|
|Short Term Tax Exempt Munis||-4.03||0.03||2.51|
|Inter. Term Tax Exempt Munis||-11.56||1.14||5.19|
|Long Term Tax Exempt Munis||-16.97||2.37||5.06|
|Short Term Investment Grade||-9.06||-0.63||5.13|
|High Yield Corporate Bonds||-17.73||3.75||4.48|
|Treasury Inflation-Protected - TIPS||-7.49||5.36||4.95|
|Total World Market||-26.77||18.27||16.61|
|Minimum Volatility Factor||-17.78||20.84||5.64|
|High Dividend Yield||-14.24||26.21||1.14|
|International Small Value||-31.05||11.7||-1.33|
|Emerging Markets Small Blend||-23.66||18.16||14.86|
|Emerging Markets Value||-24.36||14.4||-2.79|
|Two-Year Global Fixed-Income||-15.47||-2.1||6.22|
|Five-Year Global Fixed-Income||-15.47||-2.1||6.22|
|Emerging Market Bonds||-26.59||-1.81||5.66|
|Long Term Investment-grade Bonds||-32.23||-1.74||13.28|
To see which ETFs you should buy to gain exposure to an asset class we got you covered.
The best asset class in our dataset is healthcare. We have data going back to 1989 for most of our asset classes and since 1989 healthcare has been the top performer.
The reason why healthcare is so good could be because healthcare is very much top of mind for us humans. We care a lot about our health – we don’t want to die. In order for us to prevent this, we invest and spend heavily on healthcare services and products.
What is the worst asset class?
The worst asset class in our dataset is commodities. We have data going back to 1989 for most of our asset classes and since then healthcare has been the top performer.
The reason why commodities is such as bad asset class could be because of human ingenuity. We keep getting better at optimizing our use of raw materials. At the same time, we keep finding replacement materials for raw materials that have become scarce.
Another reason is that commodities are well…a commodity. There is plenty of competition and it is hard to protect one’s business with a moat in the commodity business, so prices tend to race to the bottom unless demand picks up, which it does in boom times……and then they plummet in bust-times just when producers have ramped up production exacerbating the price decline due to overproduction.
Does anyone remember peak oil?
Should I invest everything in the best asset class?
Our data goes back to 1989 so we have some 30+ years to base our conclusions on. We can’t predict which asset class will do better in the next 30 years. It is entirely possible that one asset class will dominate for decades and then fizzle out. The reverse is also true.
You only have one lifetime in which to invest, however, so while one asset class or another has shown superior performance, we find it unwise to bet the farm that the same asset class will continue its outperformance in those exact same years when YOU need it to.
Therefore we encourage you to build a diversified portfolio and tilt your portfolio towards high-performing asset classes that historically have shown the ability to perform.
At the same time, we also encourage that you avoid the worst asset classes like commodities.
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