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Which Asset Class Logged the Biggest Return in 2023?
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How did the markets do in 2023?
We visualize the one-year performance of major asset classes by tracking their relevant indexes across the globe. Data for this chart comes from S&P Global and Investing.com.
Major Asset Class Returns in 2023
Japanese equities, represented in this graphic by the Nikkei 225, were one of the strongest performers, up 30% by the end of 2023.
In May of 2023, the Nikkei hit a 30-year high, led by better corporate financial performances, a weak yen (drawing in overseas investors), and a flurry of stock buybacks.
Japan has also benefited from China’s economic woes, triggered by a spreading slowdown in the real estate sector that has had a domino effect on the rest of the $19 trillion economy. Investors looking for options outside of China didn’t have to look too far to find Japanese equities.
However the rally in the Nikkei is facing some recent hurdles: a strengthening yen since November, weak consumer demand, and the likelihood of looming international interest rate cuts will likely shift money away to other equity markets.
Here’s the list of how other major asset classes performed in the year.
| Rank | Index | Return | Asset Class |
|---|---|---|---|
| 1 | Nikkei 225 | +30.1% | Japanese Equities |
| 2 | S&P 500 | +24.2% | U.S. Large Caps |
| 3 | STOXX 50 | +17.3% | European Equities |
| 4 | S&P SmallCap 600 | +13.9% | U.S. Small Caps |
| 5 | Gold | +13.1% | Gold |
| 6 | S&P/TSX Composite |
+8.1% | Canadian Equities |
| 7 | Dow Jones Real Estate Index |
+7.8% | U.S. Real Estate |
| 8 | MSCI EEM | +7.1% | Emerging Market Equities |
| 9 | S&P U.S. Aggregate Bond |
+5.8% | U.S. Bonds |
| 10 | WTI Oil | -11.5% | Crude Oil |
| 11 | S&P GSCI | -12.2% | Commodities |
| 12 | S&P China 500 | -12.5% | Chinese Equities |
Note: Data as of December 29, 2023.
U.S. equities, real estate, and bonds all did well, as did Canadian, European, and emerging market equities.
Gold stayed high, a popular inflation-hedge, also spurred on by rising geopolitical concerns.
Oil, commodities, and Chinese equities all registered negative returns for the year—all inextricably linked together by the earlier mentioned slowing Chinese economy.
However, don’t be surprised if Houthi attacks in the Red Sea (prompted by the Israel-Hamas war) and other geopolitical stimuli reinvigorate oil prices as we continue our journey into 2024.
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