Thus far up until the first week or so into November that is. You may be surprised with the results so far; can they hang onto their gains for the rest of the year?
Please note that this was based off my searches for performance up until November 8. Some markets are considered too insignificant to appear on certain data lists so forgive me if my list is not entirely consistent with what you have come across. However please let me know in the comments area if I have left off any.
LIST OF TOP PERFORMING GLOBAL STOCK MARKETS IN THE WORLD 2021
Well, approximates USD based returns YTD around November 8.
- Mongolia +107%
- Argentina +84%
- Abu Dhabi +62%
- Costa Rica +55%
- Sri Lanka +53%
I gather those reading this now nodded their head saying to themselves, yes I know I am glad my portfolio had substantial allocations to these 5 that were widely tipped on CNBC right? NOT.
I admit my portfolio unfortunately didn’t contain exposures to these markets in 2021!
By the way as I mentioned earlier, if you disagree with the list let me know, I didn’t find it that easy to get hold of the data as I am not hooked up to Bloomberg or the like.
It seemed to be consistent with what I found on tradingeconomics.com and also a list from countryeconomy.com. The latter didn’t show up Mongolia, but I’ll leave a table below of some of the best stock markets they had for 2021.
Interestingly I have circled Vietnam above. They came in at no.14 of a list of 87. Not much separates Vietnam from 9th place though.
There you go, that hopefully addresses the question of how all this relates to the Vietnamese stock market, the title of this blog.
WHAT IS THE INFLATION RATE IN VIETNAM?
One thing I would stress is that one should consider inflation rates, so I have not adjusted the returns to get real stock market returns. On that front Vietnam has had inflation fairly well under control for at least the last 5 years (touch wood!). It has roughly averaged say the 3% mark over the last 6-7 years.
IS VIETNAM THE BEST PERFORMING STOCK MARKET IN THE WORLD IN 2021?
Not quite but you could rate it perhaps in the top ten when thinking about factoring in inflation stability. Whereas we should look at a market such as the Argentina stock market performance I mentioned above and take that with a grain of salt. We need to factor in their track record on keeping inflation under control lately. A similar warning could apply to some other stock market indices that may be ahead of Vietnam in the table above. So in taking all that into account, it puts Vietnam very high in terms of the best stock market performers in 2021, despite it being so late in getting its vaccine rollout going due to supply issues.
WHAT FACTORS LED TO THE PERFORMANCE OF THE BEST STOCK MARKETS IN 2021?
Maybe I can learn something here so I thought I would try and find out what others were saying about the reasons these markets have done particularly well so far in 2021.
Mongolia +107% – This market did have a terrible run of 3 years from late 2017 until late 2020. I have heard of some with the simple theory that you should buy any market indices after it has 3 or 4 consecutive negative years in a row so maybe it was as simple as that! Mongolia in 2021 though has been a key beneficiary of commodities like Copper and Coal rising. The latter in particular has helped with them exporting to China, benefiting from worsening relations between Australia and China.
Argentina +84% – I remarked just above about inflation getting out of control, that is a big part of the story here. Still the stock market’s performance is still a lesson to not store your money under the mattress in such an environment!
Argentina inflation spikes sharply despite battle to curb prices | Reuters
I visited there back in 2013 when looking back now inflation was very tame at 10% or so a year!
Abu Dhabi +62% – Commodities are also a factor here, with the rising oil price helping. We have also seen a huge number of mergers and acquisitions so cheap money globally doesn’t hurt at all. The exchange has also made it cheaper and more efficient to trade shares.
Costa Rica +55% – This one I’ll pass on trying to comment on, maybe the readers can leave a comment for me. As I alluded to earlier, some of these markets aren’t generally discussed on CNBC so much so its hard to track down reliable commentary. Are inflation stats reliable here? Then again are they reliable anywhere for that matter?
Sri Lanka +53% – I doubt Sri Lanka would have made this list if we did this halfway through 2021. However since about mid-August it’s chart has almost started to go vertical. The delta variant was a major concern in that area of the world in the first half of the year so that can tell the story of a tale of two halves. Newsflow on that front has been much better than most would have expected if you asked them around May. I think it is a great tourism destination also so perhaps some of the smart money flocked to this stock market early August as the covid situation was reaching an inflection point.
FRONITER AND EMERGING MARKETS VS DEVeLOPED STOCK MARKETS IN 2021
Thus far in hindsight allocation to stock markets that are more closely considered as frontier status would have generally served you better in 2021.
To get some perspective overall, the median performer on the list of 87 markets I looked up on the site earlier, had a return of about 16%.
To view some of the performance of more commonly quoted developing market indices, refer to below:
WHAT IS THE BEST GLOBAL STOCK MARKET TO INVEST IN FOR 2022?
Sorry but I will totally avoid this question! Some of these spectacular returns I am discussing seem too good to be true.
Everyone is a genius in a bull market.
Prepare for the worst but hope for the best!
Is Vietnam a good investment?
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