Total Return Review: A Look Back at 2023

Bianco Research  •  Newsclips  •  January 2, 2024

2023 began as a year of struggling fixed-income returns even after a disastrous 2022. The last FOMC rate hike was in July 2023 and the narrative has shifted from tighter policy to exactly when looser policy will arrive. Many expect the early months of 2024. 

As the Federal Reserve’s pivot on rates becomes the base case for 2024, global bonds began to rally, posting the largest 2-month gain since this index began in 1990. 

The charts and tables below put some historical perspective on the year. With some annual data going back to the 1700s, the list of sources is shown below:

Stock Sources

  • 1793 to 1845 = A regional bank stock index
  • 1803 to 1866 = A transportation stock index (turnpikes, canals, and railroads) with value weighting within each series
  • 1866 to 1927 = Macaulay railroad stocks and the industrial and utility stocks in Cowles Index
  • 1926 to present = The University of Chicago Center for Research into Securities Prices (CRSP) U.S. Total Market Index

Bond Sources

  • 1793 to 1897 = Constructed from “A History of Interest Rates” (Homer)
  • 1897 to 1927 = 15+year corporate bonds constructed from the Macauley Bond Index
  • 1927 to 1975 = 15+year corporate bonds listed on the NYSE from the University of Chicago Center for Research into Security Prices (CRSP)
  • 1975 to present = Bloomberg Long-Term Corporate Bond Index

Inflation Sources

  • 1793 to 1914 = Officer, L. H., and Williamson, S. H., 2020. “The Annual Consumer Price Index for the United States, 1774-2015”
  • 1914 to present = Consumer Price Index (CPI) All-Urban

Stock Returns

On a nominal basis, the S&P 500 Price Only Index ended the year up 24.23%. A big jump from 2022’s nearly 20% decline. 

Bond Returns

The bond market recorded an astounding rally to the end of 2023. The Bloomberg US Aggregate Index was up 5.57% on a total return basis after being down -3.42% on October 19, 2023. 

Total Return Charts/Tables
To see annualized total returns for U.S. stocks and bonds, global stocks (ACWI) and ex-U.S. global stocks (ACWI ex-U.S.), see the PDF below. Each series is shown over a 3-year, 5-year, 10-year and 20-year annualized basis.
View PDF

The PDF below details total returns for almost every major asset class across the globe.
View PDF