The end of a decade is a good time to take a step back and reflect on the events and changes that have occurred over the past ten years. In 2010, many investors feared an imminent collapse of the economic system and that asset prices would crash. Luckily, that hasn’t happened, and the global economy continues to grow, albeit with dramatic underlying rotation in countries, sectors, factors, and stocks. We’ve put together the top charts representing the most important investment themes of the past decade. Looking at the past will not enable us to predict the future. However, it’s an important reminder that the world looks dramatically different today than it did in 2010 or will in 2030 (and also a reminder of Koyfin’s financial data and powerful charting abilities!).
1. S&P 500 climbed throughout the decade, but with six drawdowns greater than 10%
The start of the decade was turbulent, as policy makers deal with the repercussions of the Great Financial Crises. Europe faced an existential challenge as member states had to decide how to handle choking sovereign debt levels in Greece, Spain, and Portugal. The US also dealt with anemic business and consumer confidence. The Fed and the ECB launched monetary stimulus programs funded by QE, which effectively calmed markets. Central banks have been able to provide monetary support without triggering meaningful inflation, which partly explains why the current us equity bull market has lasted this long.
2. Global growth was led by US and Emerging Markets
Economic growth varied widely by country and region. The US economy is 42% larger since 2010 and had the highest growth among developed countries. EU, Japan and the UK barely had any growth over the past 10 years.
Overall, GDP growth in emerging markets was higher than in the developer world. China’s economy grew by 73% since 2010 and is now tried with the EU for the 2nd largest economy. India had robust economic growth as well, up 106%. Economies tied to commodity production had slow growth on the back of lower commodity prices. Brazil, and Russia had modest positive growth but a big slowdown from the previous decade when the economies grew 3-5x.
3. US Equities were the best performing asset class
Equities were the best performing asset class of the past decade by far. The S&P 500 has increased about 3.5x (including dividends). Commodities were the worst performing asset class, down about 30% since 2010.
4. Sectors: Tech and Consumer dominated while Energy and Materials lagged
The Consumer and Tech sectors led the market with returns of about 350% (including dividends). On the flip side, Energy was the worst performing sector, up 30% over the past decade, as oil and gas prices significantly declined.
Determining how to categorize a company cleanly into a sector has become more complicated as the internet has matured. The Communications sector was created in 2018 and contains some of the fastest growing internet companies including FB, GOOGL and NFLX.
5. Factors: Growth trounces Value
Historically, returns from value stocks have outpaced returns from growth stocks, but that trend did not hold over the past decade. Value was the worst performing factor, down 14% relative to the SPY. Growth and Momentum were the best performing factors, up 14% relative to the SPY.
6. The 20 largest stocks in 2010 vs….
The 20 largest stocks in the world in 2010 were vastly different than they are today. Energy companies dominated the list with PetroChina and Exxon Mobil the two largest companies at the beginning of 2010. Six companies were in the Energy or Materials sector, versus only two today (Exxon Mobil and Saudi Aramco).
7. …the largest stocks in 2020
Relative to the start of the decade, Tech companies dominate the 20 largest list. Apple and Microsoft were the first public companies to cross the $1 trillion mark, right before the IPO of Saudi Aramco in December 2019 with a valuation of about $2 trillion (though only a 1.5% float). Nine companies on the top 20 list were also on the list in 2010: Apple, Microsoft, Alphabet (Google), JP Morgan, J&J, Walmart, P&G, Nestle, and Exxon Mobil.
8. Here’s a fun animation showing the “race” for largest market cap over the past decade
9. The best performing S&P 500 stocks over the last decade
Netflix takes the top prize as the best performing stock in the S&P 500 with a 37x return over the past 10 years. The 2nd best performing stock is less of a household name. MarketAxess is an electronic trading platform for bonds and is up 31x since 2010. Amazon did not make the list, up “only” 1,163% making it ranked number 11.
10. The largest mutual funds and ETFs in 2010 vs. today
The asset management world witnesses dramatic changes in the last decade and one of the biggest trends was the shift from active to passive. In 2010, the mutual fund industry was dominated by active managers with PIMCO’s Total Return fund at the top of the list with $200B of AUM and five other spots occupied by Capital Group’s American Funds. The largest mutual funds were magnitudes larger than the largest ETFs.
Fast forward to today, and the landscape is quite different. Vanguard’s passive offerings dominates the Mutual Funds and ETF category. Only three Capital Group actively managed mutual funds remain in the top 10 with the other mutual funds all passive. The largest ETFs manage a similar amount of AUM as the largest mutual funds, although the mutual fund industry remains bigger than the ETF industry.