Like the year before it, 2011 was a modest year for asset classes except that the signs were mostly negative. Despite the pronounced volatility, stocks finished modestly negative for the year. In a negative year for stocks, bonds did their job of providing ballast to a portfolio and finished in the positive column. REITs once again had a fantastic year: up a total of 24.17%. REIT returns for the past three years reads: 55%, 22% and 24% and one has to wonder how long the good times will last.

US stocks provided a welcome surprise in 2011. The S&P 500 returned a total of 2.11% in US dollar terms. Since the Canadian dollar depreciated by 2.2% against the US dollar, US stock markets provided meaningfully better relative returns for Canadian investors. Other major stock markets for Canadians were negative: the TSX Composite was down 8.9%, developed markets excluding the US were down 10.16% and emerging markets were down 16.58%.

CAD/USD -2.2%
DEX Universe Bond Index 9.67%
DEX Short Term Bond Index 4.65%
DEX Real Return Bond Index 18.35%
Canadian REITs 24.17%

TSX 60 -8.93%
TSX Composite -8.89%

S&P 500 (in CAD) 4.41%
MSCI EAFE (in CAD) -10.16%
MSCI Emerging Markets Index (in CAD) -16.58%

If you are interested in asset class returns for previous years, Norbert Schlenker of Libra Investments maintains a spreadsheet of total returns for various asset classes going back to 1970.

Sources: Bank of Canada, PC Bond Analytics, MSCI Barra and Standard & Poors.

PS: Note that percentage returns are inclusive of dividend or interest or distributions.

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