Navigating Market Highs and Lows: What 30 Years of Asset Class Performance Teaches Us
How have the world’s financial markets really performed over the last decade or even three? If you’ve ever wondered whether equities truly beat bonds over time, or how global events have shaped market returns, Mercer’s latest report, Asset Class Performance – March 2025, has some compelling answers.
Pulling from extensive data provided by Bloomberg and Mercer, the report maps out the trajectory of major asset classes across 10-year and 30-year horizons, weaving in the impacts of pivotal global events. Here’s what you need to know.
10 Years of Market Ups and Downs (2015–2025)
From Brexit to the pandemic, and from trade wars to tech booms, the last decade has been anything but quiet. Yet through the noise, some asset classes stood tall.
Top Performers:
S&P 500 Total Return Index (AUD)
MSCI World ex Australia (Unhedged)
S&P/ASX 300 Accumulation Index
These equity indices showed remarkable resilience despite major disruptions like:
The COVID-19 pandemic and its variants
The Russia-Ukraine conflict
Surging inflation and rising interest rates
Meanwhile, bond indices such as the Bloomberg AusBond Composite and Global Aggregate (Hedged AUD) provided more stable, albeit modest, returns — ideal for risk-conscious investors.
Real Estate Caution:
Australian REITs (AREITs) had a mixed decade, affected by interest rate swings and changing commercial property demand. Still, they provided a diversification benefit within broader portfolios.
Takeaway: Equity markets reward patience, even through volatility. Diversification across asset classes is your best defense.
30-Year Lookback: The Long Game Wins
Zooming out, the 30-year data paints a clearer picture: equities are the long-term champions.
Despite major downturns like:
The Asian Financial Crisis (1997)
The Dotcom Crash (2000)
The Global Financial Crisis (2008)
COVID-19 (2020 onwards)
The clear leaders in wealth accumulation:
S&P/ASX 300 Accumulation Index
S&P 500 Total Return Index (AUD)
These indices outperformed all others by a wide margin, reinforcing the power of compounding returns and staying invested through market cycles.
Bond and cash equivalents offered safety, but with limited growth. They played their role — preserving capital and smoothing out volatility.
Takeaway: Time in the market beats timing the market. Equities build wealth over the long haul, even when headlines scream uncertainty.
Final Thoughts
Mercer’s March 2025 report serves as a timely reminder: while markets can be shaken by political, economic, and global health crises, the disciplined investor is often rewarded in the end.
Whether you're new to investing or managing portfolios for clients, this data reinforces some timeless principles:
Stay diversified
Think long term
Don't panic during downturns
As always, past performance isn't a guarantee of future results — but it is a valuable teacher.
Source: Mercer (2025). Asset Class Performance – March 2025. Based on data from Bloomberg and Mercer analysis
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