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The Best And Worst Performing Investments Of 2023

Could a late-stage rally upset the current leaders and losers?

Much of the issues that blighted investors in 2022 have not only continued to persist in 2023 but have exacerbated predictions of an economic recession sooner rather than later.

While inflation in the United States has moderated from its highs of 9.1% in June 2022 to 3.7% in August 2023, it is still far from the Federal Reserve’s target of 2%. This has prompted another four rounds of rate hikes in 2023, pushing the Fed Fund rates to 5.25–5.50% from 4.25–4.50%, with another round of rate hikes expected by year-end.

Outside the US, war tensions are still ongoing between Russia and Ukraine, affecting supply chains of commodities and agricultural imports. Furthermore, despite relaxing its stance on zero-covid policy, China’s economy is slowing down, with the real estate sector showing signs of cracks as major developers are facing possible defaults.

Amidst this backdrop, here are some of the best and worst-performing popular markets as we come to the end of Q32023.

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Best Performing Markets In 2023

Best Performing
Market YTD Price Change
(Through 27 September 2023)
Blockchain and NFT Giants Index 44.89%
US Tech 100 34.50%
WTI Oil 21.35%
Silver 6.10%
Gold 1.91%

*Returns are in US Dollar Terms.

Cryptocurrencies and non-fungible tokens (NFTs) were the rage in 2021 before they crashed more than 50% a year later, known as the crypto winter. One CFD instrument that tracks the performance of a selection of listed companies such as Twitter, Shopify, Coinbase, DraftKings, eBay, and Robinhood is the Blockchain and NFT Giants Index available on City Index. Owing to its strong recovery in the first half of 2023, it’s the best-performing market year-to-date (YTD) with gains of around 45%.

This performance is backed by lower inflation numbers in 2023, giving investors hope of future interest rate cuts that could boost the returns of the alternative asset class. Furthermore, the potential creation of a new bitcoin exchange-traded fund (ETF) by BlackRock, together with the bitcoin halving event, has boosted interest in the cryptocurrency market.

Similarly, the other better-performing assets in 2023 are commodities like oil and precious metals. Oil in particular is expected to remain at elevated price levels as major oil producers Saudi Arabia and Russia have both committed to production cuts, at least until the end of the year.

Worst Performing Markets in 2023

Worst Performing
Market YTD Price Change
(Through 27 September 2023)
US Dollar Index 1.88%
US Dow Jones (Wall Street) 1.25%
Straits Times Index (STI) -1.41%1
S-REITS (Lion-Phillip S-REIT ETF) -5.33%1
Hang Seng Index (HSI) -12.89%2

*Returns are in US Dollar Terms unless otherwise stated.  1 Returns are in SGD Dollar Terms 2 Returns are in HKD Terms

The equities markets, which generally saw a late-stage rally in 2022, were not able to sustain the momentum in the second half of 2023. So much so that the highs recorded this year are still lower than the peaks of 2022. Among the worst-performing markets, only the US Dow Jones, which can be traded as a CFD instrument (Wall Street) with the City Index, has shown positive returns of 1.25% YTD. Contrastingly, the US Tech 100 – which is also available on the City Index as a CFD instrument – tracks the performance of technology companies, is the strongest-performing stock index YTD with returns of around 35%.

For Singapore investors, the returns of the Straits Times Index (STI) and the keenly monitored S-REITs index have shown muted performance in 2023. This is in part due to the higher interest rate environment, which has impacted the cost of borrowing for REITS.

The worst-performing stock market is the Hang Seng Index (HSI), which has been dragged down by the sluggish Chinese economy despite the government’s efforts to boost the market. Despite stagging a late rally in the 3Q2022, the HSI has dropped around 13% YTD.

As we head towards the end of the year, we can expect more volatility affecting the different markets, whether it’s due to a rate hike or release of other economic indicators. A CFD account allows us to stay nimble to seize any opportunities in the popular markets, allowing us to trade in either (buy/sell) directions. As with all investments, it’s important to understand the associated risks before undertaking such endeavours.

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