The year 2020 was a roller-coaster ride for the financial markets. The markets around the globe tumbled in the first half of the year following the lockdown, but things started to pick up after countries eased restrictions. However, not all assets recovered in the same way, and some assets didn’t recover at all. If you are planning to invest, then to help you, detailed below are the ten best performing assets of 2020.
[soros]Q4 2020 hedge fund letters, conferences and more
Best Performing Assets Of 2020
Our list of the best performing assets of 2020 is based on the return (of tracking fund) they generated last year. Following are the ten best performing assets of 2020:
-
Cash (T-Bill) (0.47%)
To track the performance of the T-Bill, we have used VUSXX (Vanguard Treasury Money Market Fund). This fund primarily invests in U.S. Treasury securities. The 3-year average annual return of the fund is 1.46%, while the 5-year return is 1.09%.
-
Int’l Bonds (4.54%)
For the international bond, we have used VTABX (Vanguard Total International Bond Index Fund). This fund provides broad exposure to the non-U.S. investment-grade bonds. The top four holdings of the fund are Foreign Currency Denominated Bonds (65.44%), Corporate Notes/Bonds (25.89%), Asset Backed Securities (5.95%) and Government Agency Securities (0.01%).
-
High-Yield U.S. Bonds (5.39%)
To track the return of this asset class, we have used VWEAX (Vanguard High-Yield Corporate Fund). This fund invests in medium- and lower-quality corporate bonds, or the so-called “junk bonds.” The top four holdings of the fund are Corporate Notes/Bonds (92.19%), Government Agency Securities (3.48%), Preferred Stock-Non Convertible (1.35%) and Fgn. Currency Denominated Bonds (0.79%).
-
All U.S. Bonds (7.72%)
For the all U.S. bonds return, we have used the VBTLX (Vanguard Total Bond Market Index Fund). This fund invests in U.S. Treasuries and mortgage-backed securities. The top six holdings of the fund are Treasury Notes/Bonds (40.22%), Corporate Notes/Bonds (29.55%), GNMA and Other Mtg Backed (23.12%), Government Agency Securities (3.47%), Fgn. Currency Denominated Bonds (1.85%), and Asset Backed Securities (0.68%).
-
Int’l Dev Stocks (10.26%)
For the return generated by this asset class, we have used the Vanguard Developed Markets Index Fund (VTMGX). This fund gives investors exposure to large, mid and small cap companies in developed markets outside of the U.S. The top ten holdings of the fund are Samsung Electronics, Nestle, Roche Holding, Novartis, ASML Holding, Toyota Motor, LVMH Moet Hennessy Louis Vuitton, BHP Group, AIA Group and SAP SE. Talking of regional allocation, the fund has invested over 50% in Europe, 38% in the Pacific and 8% in North America.
-
Emerging Market Stocks (15.24%)
To track the returns of the emerging market stocks, we have used VMEAX (Vanguard Emerging Markets Stock Index Fund). This fund invests in the stocks of companies located in emerging markets, including Brazil, Russia, India, Taiwan and China. The top ten holdings of the fund are Taiwan Semiconductor Manufacturing, Tencent, Alibaba Group, Meituan, Naspers, Reliance Industries, Ping An Insurance Group Co. of China, JD.com, China Construction Bank, and Infosys.
-
U.S. Large Cap Stocks (18.37%)
To track the return of U.S large cap stocks, we have used VFIAX (Vanguard 500 Index Fund Admiral Shares). This fund offers exposure to the 500 biggest U.S. companies, representing about three-fourths of the U.S. stock market’s value. Top ten holdings of the fund are Apple, Microsoft, Amazon.com, Alphabet, Facebook, Tesla, Berkshire Hathaway, Johnson & Johnson, JPMorgan Chase and Visa.
-
U.S. Small Cap Stocks (19.11%)
For measuring the return of the U.S. Small Cap Stocks, we have used the VSMAX fund (Vanguard Small-Cap Index Fund). This fund offers exposure to small-cap U.S. companies, a segment that is often volatile. The top ten holdings of the fund are Enphase Energy, MongoDB, Catalent, STERIS, Horizon Therapeutics, PerkinElmer, Monolithic Power Systems, Plug Power, IDEX and Novocure. These top 10 holdings account for 3.30% of the fund’s total assets. VSMAX holds 1427 stocks.
-
Gold (21.9%)
Global equity selloff triggered by the uncertainty due to the coronavirus pandemic, pushed investors toward gold. However, with talks of COVID-19 vaccines and broader economic recovery, investors have started looking for other investment avenues. Analysts expect the yellow metal to rise further in the near future on the back broader uptrend.
-
Cryptocurrencies (65%)
Many would have expected gold to be the best performing asset, but last year, crypto beat the yellow metal. The Bloomberg Galaxy Crypto Index of digital coins gained about 65% since the start of 2020. One major reason for the surge in the cryptocurrency market is the massive gain in the Ethereum (ETH) price. ETH traded around $130 at the start of last year, but jumped to $470 by September. Bitcoin also contributed to the overall performance of the crypto market.
