In this month’s Cross Asset Review, we assess the past performance of various asset classes and its implications for multi asset investors. Bond proxies such as infrastructure and real estate assets were the standout in January 2020 with strong positive return despite rising uncertainty in markets. The fear gauges such as S&P500 VIX spiked over the month on the back of virus-indiced risk to the global economy and in particular Chinese economy. As expected, AUD which is perceived as a risk currency weakened relative to most major currencies with TWI down 3.65% in January alone. A weaker AUD helped unhedged offshore asset returns, with 12 month currency effect from Global equities at 10%. The real impact of virus on global and domestic economy is unknown as this stage as the virus continues to spread. This is likely to translate into continued market volatility in the coming months.


1. Virus-induced global uncertainty contribute to continued outperformance of safe-haven assets through the month.


  • Global and Australian VIX (volatility) indices Indicate significant shifts in volatility for investors.
  • Amid this backdrop, it wasn’t surprising to see continued outperformance of safe-haven assets such as gold and bond-proxy assets such as infrastructure and real estate.
  • The US equity market volatility Index (CBOE VIX) rose 58.64% in January to be 23.84% higher over 12 months. Australian equity market VIX rose to 10.32%.
  • Gold rose 9.5% as investors continue to invest in this safe-haven post late 2019.
  • Emerging REITs, AUD (TWI), Commodities and Emerging Infrastructure were the laggards over the month delivering negative returns.

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