LONDON — Analysis of the global stock market over the last 12 months shows that some asset classes are performing much better than others, with Asia Pacific equities delivering huge returns on investment compared to European stocks.
The research, by investment company Fidelity International, shows that Asia Pacific equities have delivered a 36.89% return over the past year, while Emerging Market Equities are just behind, at 36.23%.
Asian markets have enjoyed strong growth throughout 2017 despite heightened risks from US President Donald Trump’s protectionist rhetoric.
If you invested £10,000 in Britain’s benchmark share index, the FTSE 100, on 24th June — when the UK voted to leave the EU — you would now have £12,565, according to Fidelity’s figures.
Here is a breakdown of returns since the Brexit vote:
Total returns of various asset classes since the EU referendum results
Fidelity International sourced from Datastream, June 2017. % Total returns in GBP 24/06/2016 to 15/06/2017
The value of the pound tumbled following the vote to leave the EU, and is yet to return to its pre-vote level. The surprise result of the UK’s snap election also caused the pound to drop on June 9, the day of the result. But a weaker pound has been good news for Britain’s exporters and overseas earners: since almost 70% of FTSE 100 companies’ revenue is made abroad, they make more when sterling is weak.
“For many people, the result of last June’s vote was a shock. Equally shocking was the market reaction in the following months,” said Tom Stevenson, investment director at Fidelity International.
“However, it should not have been such a surprise — the fall in the pound has been the key driver of market returns in the UK over the past year and it will be the key driver of the economy and markets over the next 12 months,” he said.
“In the grand scheme of things, the UK plays a small part in the overall global economy and whatever the outcome of the Brexit negotiations, the US economy will continue to recover, Europe will remain on the mend and emerging markets will continue to outstrip the growth in the developed world.”
Despite generally good returns, cash and commodities have been generally unprofitable.
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