Equities finished the quarter in strong fashion with returns for each of the major markets above 6% in June, lifting year-to-date returns into double digits. Bonds also saw solid returns in the quarter with each of the major markets seeing a return above 3%, lifting year-to-date returns above 5%.
Within equities, US provided the strongest returns for the quarter and year-to-date at 4.3% and 18.5% respectively. International developed was generally on par with the US markets for the quarter, helped by a weaker dollar, but trailed by 4% year-to-date. Emerging market equities saw the weakest relative returns, and China saw negative returns in the quarter as trade tensions rose.
Mid-cap growth saw a return of 26.1% for the first half of the year leading the style pack while small-cap value trailed with a return of 13.5%.
The bond sectors saw some impressive returns with credit and long treasuries reaching double digits for the year-to-date period. Both investment-grade and high-yield bonds returned 10% for the year-to-date period while long-term treasuries saw the strongest returns within fixed income at 11%.
Across asset classes, US REITs saw the strongest year-to-date returns, just shy of 20%, but saw weaker relative returns in the quarter, 1.8%.
Gold saw a big bounce in returns for the quarter, providing the strongest asset class return for the quarter at 9%, lifting it to a 10% return for the year-to-date period.
NERT Model Allocation – Choices for every investor
The NERT model allocations are designed to help participants build diversified allocations to capture the major market sectors and a variety of management styles. They are offered to aid typical participant needs for diversified, risk-adjusted allocations. NERT rebalances allocations on a regular basis attempting to keep a consistent risk and asset posture. The allocations will maintain some exposure even in underperforming classes. Diversification, by definition, means not all assets can have positive performance every period. The NERT model allocations are designed to allow any investor to participate in proven ways to reduce risk and improve returns over longer periods.