Major Asset Class Returns in 2023
Japanese equities, represented in this graphic by the Nikkei 225, were one of the strongest performers, up 30% by the end of 2023.
In May of 2023, the Nikkei hit a 30-year high, led by better corporate financial performances, a weak yen (drawing in overseas investors), and a flurry of stock buybacks.
Japan has also benefited from China’s economic woes, triggered by a spreading slowdown in the real estate sector that has had a domino effect on the rest of the $19 trillion economy. Investors looking for options outside of China didn’t have to look too far to find Japanese equities.
However the rally in the Nikkei is facing some recent hurdles: a strengthening yen since November, weak consumer demand, and the likelihood of looming international interest rate cuts will likely shift money away to other equity markets.
Here’s the list of how other major asset classes performed in the year.
U.S. equities, real estate, and bonds all did well, as did Canadian, European, and emerging market equities.
Gold stayed high, a popular inflation-hedge, also spurred on by rising geopolitical concerns.
Oil, commodities, and Chinese equities all registered negative returns for the year—all inextricably linked together by the earlier mentioned slowing Chinese economy.
However, don’t be surprised if Houthi attacks in the Red Sea (prompted by the Israel-Hamas war) and other geopolitical stimuli reinvigorate oil prices as we continue our journey into 2024.
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