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January 2023

Looking back on stock returns in 2022 may feel like a gloomy exercise, but pull back and look at combined returns for the past four years and things don’t look bad. Case in point: in 2019, 2020, 2021, and 2022, the S&P 500 composite returned 26.6%, 16.3%, 18.5%, and (18.4)%, respectively. This multi- year picture is a good reminder that investing is a long-term strategy.

For the year ending December 2022, global stocks suffered losses, with the MSCI All Country World IMI Index falling by 18% following a multi-year bull market. No region was immune from the pain, with international stocks down 15% followed by US and emerging market stocks down 19% and 20% respectively. Investors busied themselves with recession fears, rising oil prices, a stronger US dollar, and the effects of the conflict in Ukraine, while central banks around the globe continued their efforts to combat inflation by aggressively raising interest rates. The Fed increased rates in the US seven times to over 4%—the highest level in 15 years.

On the bright side, value stocks continued their rally globally and the MSCI All Country World IMI Value Index outperformed its growth counterpart by a whopping 20%. While size and profitability premiums were mixed globally, small cap stocks with growth and low profitability and those with high asset growth outperformed other small caps. Additionally, value stocks with high profitability outperformed growth stocks with low profitability, like Netflix, by a wide margin. Overall, value was a bright spot for equity investors in 2022 from many vantage points.

Selected Headlines from the Past 12 Months Graphed with the World Stock Market Performance (MSCI All Country World Index)

The chart above highlights some of the year’s prominent headlines in the context of global stock market performance as measured by the MSCI All Country World Index-Investable Market Index (MSCI ACWI IMI). We are not offering these headlines to explain market returns. But they do serve as a reminder that investors should view daily events from a long-term perspective and avoid making financial decisions based solely on the news.

Investment Review

Benchmark Funds Q4 2022 12 Months Ending
US Large Cap
Vanguard 500 Index Fund



US Large Cap Value
iShares Russell 1000 Value Index



US Small Cap
iShares Russell 2000 Index



US Small Cap Value
iShares Russell 2000 Value Index



Vanguard Total International Stock Index 



Emerging Markets
Vanguard FTSE Emerging Markets ETF



Vanguard Real Estate Index 



Investment-Grade Bonds
iShares Core Total U.S. Bond Market ETF




Individual Asset Classes

The returns for the recent quarter that are listed below are sourced from

US Stocks

The US equity market posted positive returns for the quarter and underperformed both non-US developed and emerging markets. Value outperformed growth. Small caps underperformed large caps. REIT indices underperformed equity market indices.

International Developed Market Stocks

Developed markets outside of the US posted positive returns for the quarter and outperformed both US and emerging markets. Value outperformed growth. Small caps underperformed large caps.

Emerging Markets Stocks

Emerging markets posted positive returns for the quarter and outperformed the US market, but underperformed non-US developed markets. Value outperformed growth. Small caps underperformed large caps.

Real Estate Investment Trusts

US real estate investment trusts underperformed non-US REITs during the quarter.

Fixed Income

Interest rates changes were mixed in the US Treasury market for the quarter.

On the short end of the yield curve, the 1-Month US Treasury Bill yield increased 133 basis points (bps) to 4.12%, while the 1-Year US Treasury Bill yield increased 68 bps to 4.73%. The yield on the 2-Year US Treasury Note increased 19 bps to 4.41%. The yield on the 5-Year US Treasury Note decreased 7 bps to 3.99%. The yield on the 10-Year US Treasury Note increased 5 bps to 3.88%. The yield on the 30-Year US Treasury Bond increased 18 bps to 3.97%.

In terms of total returns, short-term US treasury bonds returned +0.94% while intermediate-term US treasury bonds returned +1.02%. Short-term corporate bonds returned +1.95% and intermediate-term corporate bonds returned +2.72%. The total return for short-term municipal bonds was +2.00% and +3.81% for intermediate-term municipal bonds. Within the municipal fixed income market, general obligation performed in line with revenue bonds, returning +4.19% vs +4.21%, respectively.


We continue to recommend an asset allocation for our clients based upon personal risk tolerance and long-term objectives. A mix with a larger allocation to stock is considered riskier but has a higher expected return over time.

Thank you for your continued confidence and trust.


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