We all know we need to plan ahead, but how?
As a result, the SPX rallied 29% in 2019, and it’s the best yearly performance since 2013. And the Dow rose 22.3% in 2019, the best annual performance since 2017. Emerging markets also have a fruitful year, with the SHCOMP closed 22% higher in 2019, even with the headwind from the trade war. Russia came out at the top last year, with MSCI Russia posted a staggering 56% yearly returns.
Although some notable growth obstacles have been cleared, ironically, the growth outlook for 2020 is not so promising. A study from The World Bank shows that the global economy is set to grow just 2.5% this year, only slightly higher than last year’s number of 2.4%. The growth of advanced economies is expected to slow down from 1.6% to 1.4%, due to the weakness in the manufacturing sector. Meanwhile, the outlook of emerging markets seems a little brighter. The growth is expected to speed up from last year’s 3.5% to 4.1% this year. However, the World Bank projects that the increase in many other countries is likely to slow down in 2020 as exports and investment remain weak.
Crypto Asset: The Bright Spot
Bloomberg reports that Grayscale Investments, the largest bitcoin trust provider, recorded an inflow of USD 608 mln last year, and more than 70% of them came from institutional investors like hedge funds. That fact that the hedge fund industry has been eager to boost their performances. Data from Hedge Fund Research shows that the HFRI Fund Weighted Composite Index, which gauges the aggregate performance of the broad hedge fund sector, rose 10.4% in 2019, reversed the 4.8% losses from 2018.
Sector-wise, healthcare came out at the top, with the HFRI Healthcare Index returned 23.4%. Still, that’s a relatively small number compared to BTC’s 90% annual return. An asset that can give such a high potential performance, with increasing institutional adoptions, and ever-improving market mechanism, there’s no surprise that hedge fund managers and other investment professionals have started to embrace bitcoin as a new asset class.
Your Bitcoin Inclusion
VTI has been one of the most popular ETFs available in the market, it adopted a diversified strategy with exposure in large-, mid-, and small-cap equities, with holdings like MSFT, AAPL, JPM, and JNJ. Meanwhile, SMH focuses on 25 of the largest US-listed semiconductors companies, and XOP tracks the US oil and gas exploration & production space.
Table 1 shows the return of those ETFs in 2019 alongside with bitcoin’s annual performance. SMH and VTI both have a decent year, with a gain of 64.4% and 30.8%, respectively. However, XOP underperformed the US has been increasingly leading the expansion in global oil supplies.
Table 1: BTC/VTI/SMH/XOP 2019 Performances (Source: OKEx; ETF.com)
Table 2: Comparison of Returns (Source: OKEx)