Investment Update- How is 2010 Really Going?
April 13, 2010 | 
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- The US equity market continued its strong performance in the first quarter of 2010, the fourth consecutive quarter with above-average returns. The broad US market gained about 6% in the quarter, with all asset classes delivering solid gains again. Performance in other developed markets around the world was mixed.
- European markets as a whole had negative returns for the quarter, with Spain, Greece, and Portugal all suffering double-digit losses. On the other hand, developed markets in the Asia Pacific region, led by Japan, which had an outstanding quarter, generally fared much better. The US dollar gained ground against most major currencies, especially the euro and the pound, which hurt the dollar-denominated returns of developed market equities.
- After being the top-performing asset class for the past four quarters, emerging markets cooled off in the first quarter, although returns were still solidly positive. As in the case of developed markets, there was much dispersion in the performance of different emerging markets and asset classes. Most emerging markets experienced solidly positive returns in the first quarter, but some of the larger markets such as Brazil, China, and Taiwan had negative returns. The US dollar lost ground against the main emerging market currencies in the first quarter, which contributed to the dollar-denominated returns of emerging market equities.
- Value stocks outperformed growth stocks across all market capitalization segments in the US, while the opposite was true in other developed markets. In emerging markets, large cap value stocks trailed large cap growth stocks, while small cap value stocks outperformed small cap growth stocks.
- Along the market capitalization dimension, small caps outperformed large caps in the US, in other developed markets, and in emerging markets.
- Real estate securities were among the top performers in the first quarter in the US, but they had a flat performance in other developed markets.
- Fixed income securities had positive returns in the first quarter. Longer-term securities tended to have better performance than short-term ones.
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