All major indices and asset classes had a strong finish to 2020 despite how the year began. The Nasdaq Composite finished the year up 45.1% followed by the S&P500 gaining 18.4% and the Dow Jones Industrial Average closing out the year with a return of 9.7%. Eight out of the eleven sectors in the S&P 500 posted positive returns for the year, with Information Technology and Consumer Discretionary gaining the most with returns of 43.9% and 33.3%, respectively. On the other hand, Energy and Real Estate lost the most with returns of -33.7% and -2.2%, respectively. Large-caps continued to outperform Small-caps, which beat Mid-cap names. Specifically, the large-cap Russell 1000 Index gained 21.0%, ahead of the small-cap Russell 2000 Index’s 19.9% return for the year followed by the Russell MidCap Index’s 17.1% return. Growth stocks outperformed value stocks with the Russell 1000 Growth returning 38.5% compared with the Russell 1000 Value Index’s gain of 2.8% over the year. Bonds lagged stocks, with the Barclays U.S. Aggregate underperforming all equity benchmarks with a 7.5% return. Long-dated US Treasuries performed better with the Barclays Long-Term Treasury Index gaining 18.1%. Commodities fell, with the Bloomberg Commodity Index declining 3.5% while the dollar lost 6.69% while gold gain 21.9% and Bitcoin took off to a new all-time-high returning 305.1%. Oil prices partially recovered from their declines earlier in the year ending the year down 20.5%. All major developed countries except for France, United Kingdom and Hong Kong ended the year up in local currency terms, with the US being the best market with a total return of 18.4% followed closely by Japan at 18.2%. Emerging market countries had a strong year helped by the dollar decline with India and Shanghai posting the largest gains in local currency terms, 16.6% and 16.6%, respectively.
The stock market continued its climb in the fourth quarter with Nasdaq Composite rising 15.7% followed by the S&P500 gaining 12.1% and Dow Jones Industrial Average returning 10.7%. Energy lead the gain this quarter returning 27.8% followed by Financials returning 23.2%. All eleven sectors in the S&P 500 posted positive returns for the quarter. Small-cap stocks outperforming Mid-cap stocks, which beat large-cap names. Specifically, the Russell 2000 Index’s 31.4% return did better than Russell Mid-Cap Index and the Russell 1000 Index, which posted gains of 19.9% and 13.7%, respectively. Value stocks beat out Growth names in the quarter, as the Russell 1000 Value Index rose 16.3% compared to the 11.4% gain of the Russell 1000 Growth Index over the same period. Bonds underperformed with the Barclays Aggregate Total Return underperforming all equity benchmarks with a 0.67% gain, while long-dated US Treasuries drastically underperformed, with the Barclays Long-Term Treasury Index losing -3.0%. The US Dollar Index lost -4.2% for the quarter, while oil reversed some of their prior losses by gaining 20.6%. Gain was roughly flat losing 0.4% while Bitcoin continued its climb higher returning 170.8% for the 4th quarter.
The views expressed in this commentary reflect those of Miller Value Partners analyst(s) as of the date of the commentary. Any views are subject to change at any time based on market or other conditions, and Miller Value Partners disclaims any responsibility to update such views. The information presented should not be considered a recommendation to purchase or sell any security and should not be relied upon as investment advice. It should not be assumed that any purchase or sale decisions will be profitable or will equal the performance of any security mentioned. Past performance is no guarantee of future results.
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