The Best And Worst Performing Assets In June And Q2
By Tyler Durden
As DB’s Jim Reid says, June 2016 will always be remembered as the month when the UK voted to leave the EU and it’s fair to say that the overwhelming focus on the referendum dominated price action in markets from start to finish. Risk assets initially tumbled into mid-month as the leave campaign built momentum, however a swing back in favour for the remain campaign saw most major markets wipe out early month losses to go into the vote relatively flat. However with momentum favouring the remain camp and markets pricing in largely a remain outcome, the vote in favour to leave sparked a huge risk off move. This lasted for all of two days however before markets rebounded into month end. That said the magnitude of the post vote selloff was enough to see risk assets dominate the bottom of our June leaderboard.
So how did assets classes close out June?
In local currency terms it is equity markets that occupy the bottom. The worst performer during the month was European Banks (-18%), followed closely by the peripheral markets (Athex -15%, FTSE MIB -10% and IBEX -9%). The Nikkei (-10%) is also wedged in their which suffered with a 7% rally for the Yen. The Stoxx 600 and DAX were down -5% and -6% respectively during the month while the S&P 500 (+0.3%) just finished in positive territory on the last day of the month. The other notable underperformer during the month was unsurprisingly Sterling which tumbled just over 8%. As a result however the FTSE 100 (+5%) held in well in local currency terms, although this translates to a -4% decline and so one of the more notable underperformers when we look in USD terms.
At the top end of the leaderboard top two spots go to Silver (+17%) and Gold (+9%) which were the main beneficiaries from the risk-off moves at the end of the month. In USD terms the Bovespa actually occupies top spot however (+20%) as a result of the rally in the BRL during the month. Rates markets get an honourable mention too following the big rally in bonds in the last week. Gilts returned +6% (however -3% in USD terms) while Treasuries and other European bond markets were up between +1% and +3% (with the core outperforming the periphery). Credit markets were a bit more mixed however. In line with the wider risk off moves, higher beta credit underperformed with Eur HY and Fins Subs up to -1% lower. US HY (+1%) just stayed in positive territory while US all Corps (+2%) and Non-Fins (+3%) outperformed their EUR equivalents (+1% and +2%). GBP credit saw a similar picture with HY (-1%) and Fins subs (-1%) down but all Corps (+3%) and Non Fins (+3%) still under-performing gilts but holding in better. The latter two markets were helped by a +1.5% rally in the last week or so. It’s worth highlighting that EM bonds (+4%) and equities (+4%) had a relatively strong month all things considered.
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Source: The Best And Worst Performing Assets In June And Q2
