Equity markets around the world posted negative returns for 2018. Looking at broad market indices, the US outperformed non-US developed and emerging markets. Value stocks were positive vs. growth stocks in emerging markets but negative in the US and non-US developed markets. Small caps underperformed large caps in the US, non-US developed, and emerging markets. REIT indices outperformed equity market indices in both the US and non-US developed markets.

 

US equities outperformed both non-US developed and emerging markets. Value underperformed growth in the US across large and small cap stocks. Small caps underperformed large caps in the US.

In US dollar terms, developed markets outside the US outperformed emerging markets but underperformed the US during 2018. Value underperformed growth across large and small cap stocks in non-US developed markets. Small caps underperformed large caps in non-US developed markets.

 

In US dollar terms, emerging markets underperformed developed markets, including the US. Value outperformed growth across large and small cap stocks in emerging markets. Small caps underperformed large caps in emerging markets.

Most non-US developed and emerging markets countries posted negative returns in US dollar terms in 2018, with wider dispersion for emerging markets countries.

Most currencies depreciated against the US dollar in developed and emerging markets, notably the Australian dollar in developed markets and the Turkish lira in emerging markets. One exception was the Japanese yen, which appreciated vs. the US dollar.

US real estate investment trusts outperformed non-US REITs in US dollar terms.

The Bloomberg Commodity Index Total Return declined 11.25% in 2018. Wheat (Chicago) was the strongest performer, gaining 1.51%. Unleaded gas was the weakest performer, falling 29.68%. Coffee lost 27.93%, while sugar declined 27.53%.

For 2018, yields on the 10-year Treasury note and 30-year Treasury bond increased 29 basis points (bps) and 28 bps, respectively. The short end of the yield curve experienced the greatest increases. The yield on the 1-year Treasury bill increased 87 bps to end at 2.63%, while the 2-year Treasury note finished with a yield of 2.48% after an increase of 59 bps. In terms of total returns, short-term corporate bonds increased 1.57% for the year. Intermediate-term corporate bonds declined 0.23%. The total returns for short-term municipal bonds were 1.77%. Intermediate-term municipal bonds returned 1.57%. General obligation bonds outperformed revenue bonds.