For years, Canadian stocks outperformed international stocks and Canadian investors were left wondering if diversifying into foreign markets was worth it. Investors who showed patience and kept faith in foreign stocks were handsomely rewarded in 2013. The year was a barn burner for US markets with the S&P 500 gaining 41.52 percent (all returns reported in this post are total returns, which includes dividends, distributions or interest payments). The icing on the cake was provided by the US dollar, which gained 6.9 percent against the loonie. Developed markets also had a strong year, returning 31.26 percent. Canadian markets, by comparison, posted modest returns weighed down by the resource sector.

With interest rates creeping up over the year, real return bonds had a bad year losing 13.1 percent. In reporting asset class returns for 2012, we wondered how long REITs can keep rocketing up. REITs broke the streak of positive returns in 2013 dropping 5.5 percent.

Asset Class 2013 Returns
CAD/USD -6.46%
DEX Universe Bond Index -1.19%
DEX Short Term Bond Index 1.74%
DEX Real Return Bond Index -13.07%
Canadian REITs -5.52%
TSX 60 13.25%
TSX Composite 12.99%
S&P 500 (in CAD) 41.52%
MSCI EAFE (in CAD) 31.26%
MSCI Emerging Markets (in CAD) 4.13%


Asset Class Returns for 2013


If you are interested in asset class returns for previous years, Norbert Schlenker of Libra Investments maintains a spreadsheet of total returns for various asset classes going back to 1970.

Sources: Bank of Canada, PC Bond Analytics, MSCI Barra and S&P Dow Jones Indices.

PS: S&P 500 returns were reported incorrectly in the original post. Thanks to reader Antoni for pointing out the error.

This article has 7 comments

  1. No mention of the lack luster (har har) year for Gold. GLD etf -28%.

    • Canadian Capitalist

      @Jon D: I’ve never tracked GLD through the up years, so it’s not fair to pile on it now.

  2. Wow, talk about a banner year for equities.

    It’s great to see the portfolio take a big jump, but we’ve seen this before. Not changing my retirement plans just yet. 🙂

    • Canadian Capitalist

      @Mike: Absolutely. Patiently accumulating foreign stocks paid off in spades for investors. For those of us accumulating still, one wishes prices were lower though.

  3. Rockin’ year for the S&P 500. Doubt we’ll see a repeat.

    I wish things would tank so I could buy more equities at cheaper prices.

  4. What is your opinion of TNA,this seems to work well for a long term hold,say ten years?
    Held within TFSA for future inheritance
    10% of total portfolio.

  5. Pingback: Top 50 Canadian Personal Finance Websites | Life Insurance Canada