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Market Report Card 2020

Updated: Jan 9, 2021

It's time to look at the past year performances of the various ETFs (eg. region-based, sector-based) and individual stocks (eg. top 3 of S&P 500 etc). Please take note that this list is not exhaustive but just cover some of the more common ETFs/stocks which most retail investors are aware of.

Below is the performance table with 3 main categories (CAGR, Max Drawdown, Sharpe Ratio- if you were to own the individual ETF/stock 100% in your portfolio).

While the year 2020 didn't started off great (with the rapid drops in March) amid the whole COVID-19 pandemic, you could see from the table above that most of the ETFs and stocks in the list here have fantastic growth. Most of them ended the year in double digit growths despite having also double digit drawdowns at some point of the year. If you were to randomly just hold any one of the tickers in this list, you are very likely to have a very good year in terms of investment growth.

With some exceptions of course. If you look closely at the table, you will notice a particular ETF with negative CAGR on the list. That is iShares MSCI Singapore ETF. This is of little surprise as STI is the region's worst performer in 2020.

While Bitcoin has a fantastic year (outperforming almost every other ETF and the top 3 of S&P 500- Apple, Amazon and Microsoft) with a growth of ~300% in a single year, one stock more than doubled the growth of Bitcoin. And that stock is none other than Tesla. I am still scratching my head over this. How could one particular stock grew more than 7 times in a single year? If there is one thing you wish you had done in 2020, I'm sure it will be to buy and hold Tesla for the whole of 2020.

Let's rearrange the table according to the sharpe ratio to have a better understanding of the performances of these ETFs/stocks.

Now, you know why everyone is talking about ARK ETFs. I wrote an article on ARK ETFs previously and you might like to check it out. With the exception of Tesla, the top few on these lists are all ARK ETFs! That speaks volumes about the performance of ARK ETFs. Out of all ARK ETFs, ARKG ETF performs the best with a growth of ~180% but only a max drawdown of less than 10%.

Among the 3 major US indices, it's also of little surprise that Nasdaq (as represented by Invesco QQQ Trust in this list) performed the best with a CAGR of 48.4% and a max drawdown of only -12.9%. Such high value of CAGR for a major index is a rare occurrence, with several groups believing that a reversion to mean is likely to happen. S&P 500 (as represented by Vanguard 500 Index in this list) had a good year too with a CAGR of 18.25% and a max drawdown of -19.63%. DJIA (as represented by SPDR Dow Jones Industrial Avg ETF) performed the worst with a CAGR of 9.61% and a max drawdown of -22.61%.

Amazon and Apple outperformed all the indexes again with Microsoft having almost identical performance as the NASDAQ. All 3 of them outperformed the S&P 500 again.

When we look at the other regions, we can see that China has a good year. The iShares MSCI China ETF even outperformed the S&P 500 with a CAGR of 27.79% and a max drawdown of -19.63%. I personally think that China is definitely the region to look at for the next decade and I foresee such outperformance will likely continue in the years ahead. The other ETFs (Emerging Markets and World) performed worse than the S&P 500. That is slightly disappointing as I would expect the iShares MSCI World ETF to have a lesser max drawdown than the S&P 500.

Besides the STI having a disappointing year, BRK.B (Berkshire Hathaway Inc. Class B) also had a very disappointing year with a CAGR of only 2.37% and a max drawdown of -21.19%. The S&P 500 outperformed the BRK.B once again. This seems to be a common pattern in recent years, especially when the market is booming. You may check out my other article on BRK.B which I discussed more about such outperformance of S&P 500 in comparison to BRK.B.

So, that's the end of a quick summary of the performance of the various ETFs/stocks. If your portfolio comprise mostly of constituents above the Vanguard 500 Index in the table shown above, congratulations to you. You have likely beat the market last year.

Any thoughts on which ETF or stock is likely to outperform the broader market in 2021? Feel free to follow me on Twitter and share with me your thoughts.

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