Annual returns for local-currency and dollar-denominated equity and fixed income indexes
| Index | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| U.S. Dollar Index | 1.50 | 1.46 | -0.51 | 0.37 | 12.68 | 9.25 | 3.57 | -9.87 | 4.26 | 0.32 | -6.75 | 6.37 | 8.21 | -2.11 |
| MSCI EAFE Index (local currency) | 5.26 | -11.74 | 17.89 | 27.46 | 6.38 | 5.78 | 5.88 | 15.77 | -10.54 | 22.31 | 1.28 | 19.25 | -6.52 | 16.77 |
| MSCI EAFE Index (U.S. dollar) | 8.21 | -11.73 | 17.90 | 23.29 | -4.48 | -0.39 | 1.51 | 25.62 | -13.36 | 22.66 | 8.28 | 11.78 | -14.01 | 18.85 |
| MSCI EM Index (local currency) | 14.40 | -12.47 | 17.39 | 3.79 | 5.57 | -5.40 | 10.11 | 31.00 | -9.73 | 18.52 | 19.50 | 0.14 | -15.16 | 10.29 |
| MSCI EM Index (U.S. dollar) | 19.20 | -18.17 | 18.63 | -2.27 | -1.82 | -14.60 | 11.60 | 37.75 | -14.25 | 18.90 | 18.69 | -2.22 | -19.74 | 10.27 |
| J.P. Morgan GBI Global (Hedged) | 3.36 | 4.71 | 5.11 | 1.26 | 9.95 | 1.56 | 4.19 | 0.50 | 1.11 | 5.25 | 3.36 | -2.56 | -13.88 | 4.38 |
| J.P. Morgan GBI Global (Unhedged) | 6.78 | 5.91 | 0.84 | -5.08 | -2.53 | -4.84 | 1.86 | 9.92 | -1.68 | 5.23 | 10.52 | -9.51 | -21.87 | 3.99 |
| J.P. Morgan GBI EM Global Index (local currency) | 15.44 | -1.91 | 14.98 | -8.52 | -4.68 | -16.98 | 11.73 | 15.23 | -5.98 | 13.83 | 1.32 | -3.73 | -8.65 | 7.65 |
| J.P. Morgan EMBI Global Index (dollar denominated) | 12.04 | 8.46 | 18.54 | -6.58 | 5.53 | 1.23 | 10.19 | 9.32 | -4.61 | 14.42 | 5.88 | -1.51 | -16.45 | 10.45 |
Sources: Bloomberg, © 2023 – Morningstar Direct, All Rights Reserved1, and Wells Fargo Investment Institute, as of December 31, 2023. For illustrative purposes only. The higher value for local currency/hedged vs. U.S. dollar denominated/unhedged is highlighted in green. MSCI EAFE Index is designed to represent the performance of large and mid-cap securities across 21 developed markets, including countries in Europe, Australasia and the Far East, excluding the U.S. and Canada. The MSCI Emerging Markets Index (USD/Local) is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. J.P. Morgan GBI Global ex-U.S. (Unhedged) in USD is an unmanaged index market representative of the total return performance in U.S. dollars on an unhedged basis of major non-U.S. bond markets. J.P. Morgan GBI Global ex-U.S (Hedged) is an unmanaged market index representative of the total return performance, on a hedged basis, of major non-U.S. bond markets. J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) is a U.S. dollar-denominated, investible, market cap-weighted index representing a broad universe of emerging market sovereign and quasi-sovereign debt. J.P. Morgan Emerging Markets Bond Index Global (Local Currency) (USD Unhedged) is a comprehensive global local emerging markets index, and consists of regularly traded, liquid fixed-rate, domestic currency government bonds. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. Index returns do not represent investment performance or the results of actual trading. Index returns reflect general market results, assume the reinvestment of dividends and other distributions, and do not reflect deduction for fees, expenses or taxes applicable to an actual investment. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. Investing in stocks involves risk and their returns and risk levels can vary depending on prevailing market and economic conditions. Bonds are subject to market, interest rate, price, credit/default, liquidity, inflation and other risks. Prices tend to be inversely affected by changes in interest rates. Foreign investing has additional risks including currency, transaction, volatility and political and regulatory uncertainty. Currency risk is the risk that foreign currencies will decline in value relative to that of the U.S. dollar. Exchange rate movements between the U.S. dollar and foreign currencies may cause the value of an investment to decline.
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Key Takeaways
- International assets, priced in U.S. dollars, have tended to underperform their local-currency-denominated counterparts when the U.S. dollar is up strongly.
- In 2023, in general, equity and fixed-income indexes priced in their local currency (or unhedged) outperformed U.S.-dollar-denominated indexes for a second consecutive year.