2017’s Winners and Losers
Financial Markets around the world produced some surprising results in 2017. Indeed, in defiance of gloomy predictions, many asset classes delivered healthy returns. You’ll probably recall that at the beginning of 2017, the common view among commentators and fund managers was that the financial markets would not repeat their strong returns from 2016. Many cited the uncertain global economy, political turmoil in the US, implementation of Brexit, conflicts in the Middle East, North Korea’s weapons buildup, and other factors. The global equity markets defied their predictions, with major equity indices in developed and emerging markets posting strong returns for the year.
- 1st: DIMENSIONAL EMERGING MARKETS CORE EQUITY FUND
- +23.67%return 01/01/17 to 31/12/17
- 2nd: Dimensional UK Smaller Companies fund
- +17.87%return 01/01/17 to 31/12/17
- 3rd: Dimensional UK Value Fund
- +15.65%return 01/01/17 to 31/12/17
- 4th: Vanguard FTSE UK All Share Index Plus
- +12.99%return 01/01/17 to 31/12/17
- 5th: Dimensional International Core Equity Fund
- +11.62%return 01/01/17 to 31/12/17
- 6th: Dimensional International Value Fund
- +9.67%return 01/01/17 to 31/12/17
- 7th: Vanguard Global Bond Index
- +0.85%return 01/01/17 to 31/12/17
- 8th: Dimensional Global Short Dated Fund
- +0.46%return 01/01/17 to 31/12/17
As to what happens next, no-one knows for sure. That is the nature of risk. You just have to look at the randomness of these returns to realise that trying to consistently cherry pick the winners and losers would be nigh on impossible. Instead as investors we can maximise our probability of having a successful investment experience and protect ourselves by diversifying broadly across and within many asset classes. And as a final lasting thought whilst Bonds have provided a pretty paltry return for investors in 2016 and 2017 when we do hit that bump in road (and have a stock market fall) those bonds should help cushion the fall.
(Source: Dimensional Fund Advisors/Vanguard)
Past performance is shown net of Dimensional fees/Vanguard funds are chosen gross. Past performance does not necessarily indicate future performance. The investment return and principal value will fluctuate so that an investment’s shares/assets, when redeemed, may be worth more or less than their original cost.