It will hardly come as a surprise that with every asset manager in the past two months doing what they do best in the New Paranormal, namely frontrunning central banks, European assets, whether denominated in EUR of USD are some of the best performing assets. But which European assets? As the chart below shows, what came down - fast - in January, has since rebounded, on hopes that the Eurozone will preserve its current configuration for at least 4 more months, and sure enough, Greece has generated 20% returns in February alone, which means anyone who BTFD on January 31, and put all their funds in Athens stocks, can now take the rest of the year off. Then again, anyone who bought Greece on December 31, is now exactly where they were back then, actually slightly in the red.
On the other extreme, with over 20 central banks now aggressively easing in order to offset what everyone believes is an imminent liquidity-soaking rate hike by the Fed (which very well may not happen if and when Q1 GDP is revealed to have grown just about 1% after all the snow in the winter), it is only logical that gold (and close behind it, silver) was the worst performing asset in February, because the BIS boys led by Benoit Gilson have to do something to earn their money.
As for the best performing asset overall in 2015? Well, just tell Putin "spasibo."
So without further ado, here is DB explaining and charting the best and worst performing assets of February and YTD:
An eventful January rolled into an eventful February with European equities continuing their impressive start to the year. Peripheral equities performed very strongly with the Greek stock market, the top performer this month returning 22%, the Portugal General index returning 10.8%, the Italian FTSE MIB returning +8.9% and the Spanish IBEX 35 returning 7.4% in local currency terms.
Looking at February returns in USD terms, the most notable difference is in Russian Micex which jumps up the performance board returning over 20% in February (Figure 2).
Core European markets weren’t left behind by much however with the DAX returning 6.6% and the broad DJ Stoxx 600 returning 7%. Indeed equities around the world did well in February with the S&P500 returning 5.7%, the FTSE100 hitting new highs and returning 3.4% and EM markets in Brazil, Russia and China returning 10%, 6.8% and 3.1% respectively in local currency. The other notable performer was oil, with Brent up 16%. Government bonds and precious metals were the notable underperformers with the UK Gilt and the US Treasury both suffering negative total returns of -4.5% and -1.5% respectively after their strong performance in January, and silver and gold down -3.8% and -5.5% respectively.
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In terms of YTD dollar performance, equities have been the place to be with most markets notably up with the best of the performance in Russia, Europe and Japan. US fixed income has had a decent start to the year with US HY and IG non-financial and Treasuries returning 2.9%, 2.1% and 1.3% respectively whilst the European equivalent HY, IG non-financial and Bund markets have returned -4.5%, -5.5%, -5.1% respectively in USD terms, not helped by the - 7.5% move in EURUSD.
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