We review broad asset classes using ETF constituents to provide a Q3 2020 performance update
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Although not as extreme as Q2 of this year, the third quarter of 2020 was generally a positive one for the major asset classes covered in this piece as each posted an average gain from June 30th – September 30th. Beginning with domestic equities, despite the second highest average group return of 7.73% a notable performance gap remains across and within the space. Note that the two momentum representatives, PDP and DWAS, are the top performing ETFs as both tend to benefit from high dispersion (clear leaders and laggards) within their respective universes. Also noteworthy, the end of Q3 pushed SPY to its best six-month return since 2009 (Source: wsj.com).
Perhaps more surprising, international equites notched the best average group performance for the quarter with a gain of 8.55%. Similar to the domestic equity space, a developed momentum fund, PIZ, led the charge with a gain of 12.31%. Broad emerging markets EEM also ran a good race, and with several tailwinds still in place from last quarter the group pushed over 10% higher. Commodities saw positive returns as well with broadening participation, averaging together for the third highest quarterly return just under 7%. We saw the dollar trend lower for most of the quarter, UUP posting a loss of -3.29%, and fixed income remain relatively steady with BND falling just 0.14%.
Deeper and more detailed discussions will follow the asset classes mentioned above in next week’s report.
