Q1 2022 Equity Returns: Results and Comments

By admin_45 in Blog

We have a wrap-up of global, regional, and country-specific equity market price returns (i.e., not including dividends) for Q1 2022 and over the last 12 months. All the data below reflects dollar-based returns.

Global/regional Q1 and 1-year returns:

• MSCI All-Country World Index: -5.7 percent Q1, +4.9 percent 1-year
• MSCI All-Country ex-US Index: -6.0 pct Q1, -5.3 pct 1-year

• S&P 500: -5.0 percent Q1, +14.0 percent 1-year
• NASDAQ Composite: -9.1 pct Q1, +7.4 pct 1-year
• Russell 2000: -7.8 pct Q1, -6.8 pct 1-year

• MSCI EAFE (non-US developed economies): -6.5 percent Q1, -3.0 percent 1-year
• MSCI Europe: -8.2 pct Q1, -1.1 pct 1-year
• MSCI Emerging Markets: -7.8 pct Q1, -15.4 pct 1-year

Comment: US large caps were the least-bad of any of the major global equity options in Q1, with the S&P 500 down 5.0 percent. Everything else was down in a fairly tight range of 7-9 percent. Also worth noting: only US stocks now show positive 1-year returns, with MSCI EAFE, Europe, and Emerging Markets now down on a price basis over the last 12 months.

Non-US country returns (MSCI Indices):

• Japan: -9.0 percent Q1, -10.1 percent 1-year
• United Kingdom: +1.5 pct Q1, +7.4 pct 1-year
• France: -9.1 pct Q1, +1.4 pct 1-year
• Switzerland: -6.9 pct Q1, +11.0 pct 1-year
• Germany: -13.4 pct Q1, -15.1 pct 1-year

• China: -15.7 percent Q1, -35.3 percent 1-year
• Taiwan: -7.8 pct Q1, +2.5 pct 1-year
• India: -2.8 pct Q1, +5.7 pct 1-year
• South Korea: -8.5 pct Q1, -20.6 pct 1-year
• Brazil: +34.7 pct Q1, +13.0 pct 1-year

Comment: only the UK managed a positive Q1 return, and we still like MSCI UK for its overweight to Energy. Brazil has an even greater Energy/Materials overweight, which is why it was the best performing major market in the world in Q1. India saw a rush of investor interest last year as capital left Chinese equities, but this effect is waning in 2022. We have been cautious on Chinese equities for almost a year and remain so now, even with their recent bounce off very oversold lows in mid-March.

US Large Cap Sectors (listed by best to worst Q1 returns):

• Energy: +37.7 percent Q1, +55.8 percent 1-year
• Utilities: +4.0 pct Q1, +16.3 pct 1-year
• Financials: -1.9 pct Q1, +12.5 pct 1-year
• Consumer Staples: -1.6 pct Q1, +11.1 pct 1-year
• Materials: -2.7 pct Q1, +11.9 pct 1-year
• Industrials: -2.7 pct Q1, +4.6 pct 1-year
• Health Care: -2.8 pct Q1, +17.4 pct 1-year
• Note: S&P 500 -5.0 percent Q1

• Real Estate: -6.7 pct Q1, +22.4 pct 1-year
• Technology: -8.6 pct Q1, +19.7 pct 1-year
• Consumer Discretionary: -9.5 pct Q1, +10.1 pct 1-year
• Communication Services: -11.5 pct Q1, -6.2 pct 1-year

Comment: seven of the eleven S&P large cap sectors outperformed the index. One could have gone old-school cyclical overweight (Energy, Industrials, Financials) and outperformed, or full-on defensive (Utilities, Staples, Health Care) and beaten the market as well. We continue to like the cyclical approach and Health Care for more risk-averse investors.

Global Big Tech (listed by best to worst Q1 returns):

• Tesla: +2.0 pct Q1, +61.3 pct 1-year
• Apple: -1.7 pct Q1, +43.0 pct 1-year
• Infosys: -1.7 pct Q1, +33.0 pct 1-year
• Amazon: -2.2 pct Q1, +5.4 pct 1-year
• Google: -4.0 pct Q1, +34.9 pct 1-year
• NVIDIA: -7.2 pct Q1, +104.4 pct 1-year
• Alibaba: -8.4 pct Q1, -52.0 pct 1-year
• Microsoft: -8.3 pct Q1, +30.8 pct 1-year
• Samsung: -11.1 pct Q1, -16.0 pct 1-year
• Taiwan Semi: -13.3 pct Q1, -11.9 pct 1-year
• ASML: -16.1 pct Q1, +8.2 pct 1-year
• Tencent: -15.6 pct Q1, -38.7 pct 1-year
• Meituan: -28.8 pct Q1, -47.8 pct 1-year
• Facebook: -33.9 pct Q1, -24.5 pct 1-year

Comment: Tesla was the only global Big Tech company to show a gain in Q1, but Apple, Amazon and Google did at least manage to beat the S&P 500. Further down the list are the Chinese and Asian Big Tech companies, with some truly bad YTD and 1-year returns. The very worst YTD global Big Tech return goes to Facebook.