A Journey Through Asset Class Performance: A 30-Year Perspective
Investing for the long term requires a steady hand and a clear perspective on how different assets behave over time. A recent June 2025 report from Mercer on Asset Class Performance provides a fascinating visual journey of how various investments have fared over both a 10-year and a 30-year horizon. These charts not only track the growth of a hypothetical investment but also map out major market events, offering context to the peaks and valleys along the way.
It is critical to remember that these charts illustrate historical data, and as the report wisely notes, "Past performance is not an indicator of future performance".
The Last Decade: A Look at the 10-Year Horizon
Viewing performance from June 2015 to June 2025, the chart shows a dynamic period for investors. This timeframe was marked by significant events such as the "Trump Election", "Interest Rate and Trade War Concerns", the "Coronavirus Pandemic", "Global Inflation Fears", and subsequent interest rate movements by the US Federal Reserve.
Over this 10-year period, different asset classes showed varied performance:
The S&P 500 Total Return Index in AUD was a standout performer, showing the most significant growth.
The MSCI World ex Australia Unhedged in $A and the S&P/ASX 300 Accumulation also demonstrated strong growth, outpacing other asset classes.
In contrast, bond-focused assets like the Bloomberg AusBond Bank Bill and the Bloomberg AusBond Composite provided more stable, albeit much lower, returns.
The Bigger Picture: The 30-Year Horizon
Expanding the view to a 30-year horizon from June 1995 to June 2025, the power of long-term investing, particularly in growth assets, becomes even more apparent. This longer timeframe includes major historical events like the "Asian FX Crisis", the "'Dotcom' Crash", the "Global Financial Crisis (GFC)", and the "Lehman Brothers Bankruptcy".
Despite these periods of significant downturn, the 30-year chart highlights a clear trend:
The S&P 500 Total Return Index in AUD once again emerged as the top-performing asset class over the long run.
The MSCI World ex Australia Unhedged in $A also showed very strong performance over the three decades.
Australian equities, represented by the S&P/ASX 300 Accumulation, also provided substantial long-term growth.
Fixed-income assets such as the Bloomberg AusBond Bank Bill and Bloomberg Global Aggregate (Hedged AUD) remained relatively flat, underscoring their role as sources of stability rather than high growth.
Navigating the Markets
These charts from Mercer provide a powerful illustration of the historical performance of various asset classes. They underscore the potential of equities for long-term growth while also showing how they are more susceptible to volatility from major market and economic events. Conversely, bonds have historically offered stability.
This information is general in nature and does not take into account personal circumstances. As always, consulting with a financial adviser and referring to the relevant Product Disclosure Statement (PDS) is recommended before making any investment decisions.
Reference:
Mercer. (2025). Asset class performance. Mercer Investments (Australia) Limited.
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