Unlike the previous 5 years, when there was generally a uniform move higher or lower across multiple asset classes, 2021 was an incredibly even year with a roughly equal number of winners and losers. Precious metals and sovereign bonds both lost ground, and EM assets mostly struggled across the board, economists at Deutsche Bank report.

Precious Metals

“After its strongest performance in a decade in 2020, gold fell by -3.6% in 2021, marking its worst annual performance since 2015. Silver (-11.7%) had an even weaker performance, in what was also its biggest decline since 2015, whilst others including palladium (-22.2%) and platinum (-9.6%) lost ground too.”

Sovereign Bonds

“These got off to a weak start and struggled to recover their losses through the year, not helped by the massive stimulus that arrived on the scene at the start. US Treasuries (-2.5%) and UK gilts (-5.2%) both recorded their first negative annual total return since 2013, whilst EU sovereigns (-3.4%) saw their first negative performance since 2006.”

EM Assets

“In equities, they didn’t share the gains seen in developed markets, with the MSCI EM index losing -2.5% over 2021. The regulatory crackdown in China hurt a number of sectors there, and there were concerns about property markets and China Evergrande Group in particular. A number of EM currencies also struggled significantly, including the Turkish Lira (-44.2%) and the Argentine Peso (-18.5%), although this was admittedly not helped by the US dollar’s outperformance (+6.4%).”