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A
fter a rocky start to the 2016 calendar year and one
of the most volatile presidential elections in U.S.
history, domestic equities finished the year strong.
The S&P 500 Index produced a calendar year return of
11.96%. Each quarter throughout the year, the S&P slowly
gained speed with the first quarter showing a return of a
nominal 1.35%. In the fourth quarter alone, the S&P 500
Index returned 3.82%.
In the U.S., small capitalization equities proved to be the
most successful in 2016. Over the one-year time period, the
Russell 2000 Index returned 21.31%, with a 8.83% return
in the fourth quarter. Value oriented equities outperformed
growth in 2016. Small cap value equities outperformed
small cap growth by 14.78% and large cap value equities
outperformed large cap growth by 11.54%.
International developed markets experience volatility
throughout the year – losing 3.01% in the first quarter, then
gaining 6.43% in the third quarter, and finally -0.71% in
the fourth. The MSCI EAFE Index posted returns of 1.00%
for the 2016 calendar year. However, emerging markets
produced positive returns in 2016. The MSCI EM Index ends
the year with a positive 11.19%. Most of which was gained
in the third quarter when the index returned 9.03%.
In December, the Federal Reserve decided to raise the Fed
fund rate by 0.25% to a target range between 0.50% and
0.75%. This is the first time the Federal Reserve has raised
rates since December of 2015. The Fed noted they will likely
increase rates into 2017. The bond markets returned 2.65%
for the 2016 calendar year. Most of the returns in the bond
market were generated in the first and third quarter of the year.
PAGE 1
ECONOMIC REVIEW
© Copyright 2017. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved.
Source: Morningstar Direct
The chart below shows the major index and Morningstar
category style returns for the quarter, one-year, three-year,
and five-year time periods ending December 31, 2016.
Retirement Matters
4TH QUARTER 2016 | ISSUE NO. 61
Managing Your Retirement Plan Just Got Easier.
IN THIS UPDATE:
ECONIMIC REVIEW. ................................................... PAGE 1
2016: YEAR IN REVIEW.............................................. PAGE 2
PERFORMANCE
Name
QTR 1 YR
3 YR 5 YR 10 YR
BBgBarc US Agg Bond
TR USD
-2.98% 2.65% 3.03% 2.23% 4.34%
S&P 500 TR USD
3.82% 11.96% 8.87% 14.66% 6.95%
Russell 2000 TR USD
8.83% 21.31% 6.74% 14.46% 7.07%
MSCI EAFE NR USD
-0.71% 1.00% -1.60% 6.53% 0.75%
MSCI EM NR USD
-4.16% 11.19% -2.55% 1.28% 1.84%
Morningstar
Large Value
6.31% 14.73% 6.81% 12.93% 5.38%
Morningstar
Large Growth
-0.28% 3.19% 5.69% 12.94% 6.90%
Morningstar
Small Value
12.18% 25.90% 6.60% 13.86% 6.70%
Morningstar
Small Growth
3.31% 11.12% 3.53% 12.31% 7.07%