Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

15 May 2024

Home / 441

Morningstar asset class performance, 2021 and historical

The start of a new year is a good time to review portfolio performance and consider long-term settings for a financial future.

This article breaks Morningstar reporting into five tables to show market performance over all time periods to 30 years, as well as measures of risk and drawdowns. The chart on long-term performance shows Australian equities and listed property doing best since 1989. 

Table 1: Asset class performance from 1 month to 30 years

Table 2: Standard deviation (a measure of risk) by asset class

Table 3: Historical 1-year returns

Table 4: Historical 5-year returns

Table 5: Historical drawdown (market falls)

Tables sourced from Morningstar Adviser Research Centre.

Chart

Source: Morningstar Adviser Research Centre.

 

Access data and research on over 40,000 securities through Morningstar Investor, as well as a portfolio manager integrated with Australia’s leading portfolio tracking service, Sharesight. Sign up to a free, four week trial below:

Try Morningstar Investor for free

 

5 Comments
D Ramsay
January 15, 2022

Could we please also get the modal values (i.e. mode = the most common score) into the Historical 1 and 5 -year returns into those tables please as it would give a perspective of how Normalized or Skewed the distribution is.

John
January 13, 2022

The chart included (showing relative performance of asset classes) is in a format that I have long considered poor because it is easily manipulated by merely changing the start date. My other criticism is that there is virtually no investor that has that exact experience.

Instead, I suggest an alternative.

Instead of starting with a dollar investment, some time in the past, instead produce a graph that has today as its end date, with each of the asset classes ending up with $100 invested, and the line of the graph says for each date on the horizontal axis, how much money would need to be invested to end up with the $100.

The highest performing asset class would in this graph be the one with the lowest amount of initial investment. The big advantage of this graph would be that any investor could select a start date, and see how much they needed to invest at that start date, in that asset class to end up with $100 now. You could see what proportion of investment dates (finishing today) would produce negative returns, and what proportion positive (or you could make a good guess along those lines)

Dudley
January 13, 2022

"with each of the asset classes ending up with $100 invested":

Better; then only need to time travel to make guaranteed outcome investments.

Tomorrow's race results are best.

Alexander Stitt
January 15, 2022

Wholeheartedly agree with John, that showing a common end point allows a much better understanding of where past performance differentials have arisen and overcomes the problem in the choice of start date; and I've long though this. A quick look at how different the results would be on the existing chart if the start date was 2006 vs 2009 easily illustrates the point. Maybe such a chart requires a bit more work from the user to comprehend, but is, in effect, just the tables of "past 1 years performance", "past 3 years performance", "past 10 years performance" put into a common chart with all time intervals on display all the way back to the chart start, not just the arbitrary "1 year", "3 year" "10 year" etc. observations.

I suspect Dudley, in his comment, did not fully understand what John was proposing.

Dudley
January 15, 2022

Been presenting semi-log cumulative total value normalised to 1 at current date for years.
More clearly shows relative growth rates.
Does not predict future.

 

Leave a Comment:

RELATED ARTICLES

Diversification is not a free lunch

Firstlinks is sponsored by:
banner

Most viewed in recent weeks

Are term deposits attractive right now?

If you’re like me, you may have put money into term deposits over the past year and it’s time to decide whether to roll them over or look elsewhere. Here are the pros and cons of cash versus other assets right now.

Five months on from cancer diagnosis

Life has radically shifted with my brain cancer, and I don’t know if it will ever be the same again. After decades of writing and a dozen years with Firstlinks, I still want to contribute, but exactly how and when I do that is unclear.

Uncomfortable truths: The real cost of living in retirement

How useful are the retirement savings and spending targets put out by various groups such as ASFA? Not very, and it's reducing the ability of ordinary retirees to fully understand their retirement income options.

Is Australia ready for its population growth over the next decade?

Australia will have 3.7 million more people in a decade's time, though the growth won't be evenly distributed. Over 85s will see the fastest growth, while the number of younger people will barely rise. 

How retiree spending plummets as we age

There's been little debate on how spending changes as people progress through retirement. Yet, it's a critical issue as it can have a significant impact on the level of savings required at the point of retirement.

20 US stocks to buy and hold forever

Recently, I compiled a list of ASX stocks that you could buy and hold forever. Here’s a follow-up list of US stocks that you could own indefinitely, including well-known names like Microsoft, as well as lesser-known gems.

Latest Updates

Shares

Are term deposits attractive right now?

If you’re like me, you may have put money into term deposits over the past year and it’s time to decide whether to roll them over or look elsewhere. Here are the pros and cons of cash versus other assets right now.

Retirement

How retiree spending plummets as we age

There's been little debate on how spending changes as people progress through retirement. Yet, it's a critical issue as it can have a significant impact on the level of savings required at the point of retirement.

Estate planning made simple, Part I

Every year, millions of dollars are spent on legal fees, and thousands of hours are wasted on family disputes - all because of poor estate planning. Here's a guide to a key part of estate planning - making an effective will.

Investment strategies

Markets are about to get a whole lot harder

As the world shifts away from one of artificially suppressed interest rates and cheap manufacturing, investors will need to carefully consider how companies are positioned to navigate the new higher-cost paradigm.

Investment strategies

Why commodities deserve a place in portfolios

2024 looks set to be another year of reflation and geopolitical uncertainty — with the latter significantly raising the tail risk of a return to problematic inflation. That’s a supportive backdrop for commodities.

Property

What’s next for Australian commercial real estate?

It's no secret that Australian commercial property has endured its most challenging period since the GFC. Yet, there are encouraging signs that the worst may be over and industry returns should improve in the medium term.

Shares

Board games: two hidden risks for stock pickers?

Allan Gray's Simon Mawhinney thinks two groups with huge influence over our public companies often fall short of helping shareholders. In this interview, Mawhinney also talks boards, takeovers, and active investing.

Sponsors

Alliances

Site Map

About Firstlinks

© 2024 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.