Only two asset classes achieved returns greater than 10% in the past year. It was deemed as the worst annual period in the past 20 years for many asset classes, says IndexInvest investment
managers.  The best performances came from direct property and commodities which returned 11% and 17% respectively in 2022. It is worth noting direct property was the best performer of all asset
classes over the past 20 years, returning an average 10.2% annually between 2003-22,overtaking Australian shares at 8.9%.

Contrasting this, eleven of the twelve other asset classes were last year in the red, with notably global property (G-REITs) -24% and currency hedged international shares -22%. Cash attained 1% to avoid a negative outcome.

“Notwithstanding direct property was top over this time-frame, Australian shares having achieved 8.9%p.a. is also to be regarded as extremely positive. It demonstrates the value of
having an allocation to each of shares and property to achieve a consistent, high return. Diversification continues as a highly relevant principle for most people to invest by,” he said.

IndexInvest director Mark Holzworth, warned investors not to chase commodity returns by “hoping for a pot of gold at the end of the rainbow”. He said, “This asset class is comprised of many differing constituents and seeking to predict which if any will out-perform is a significant challenge. Commodities are prone to record periods at the very top of the table typically followed by periods at the very bottom.”

“The commodities class has topped the table six times over these past 20 years, however has also come last in seven of those 20 years,” said Mr Holzworth.

By Jane Purnell | | In Financial Goals, property |