Special Report: For global stock markets, the decade which followed 2008’s global financial crisis certainly proved to be a unique one.

It started off with an emergency, sparked by the unravelling of some US mortgage markets and the billions of dollars in derivatives linked to those underlying assets.

That, in turn, prompted an unprecedented stimulus response to keep the global economy afloat — first by governments and then by central banks, as interest rates were slashed to zero in most of the world’s largest economies.

In hindsight, the theme of easy monetary policy – low rates and quantitative easing – would come to define a lot of market activity in the 10 years that followed.

But when it comes to equity investing, things are never quite that simple. Different markets across the world had vastly different returns over the past 10 years, due to factors unique to the economies in which they operate.

And the latest interactive research from IG Markets helps provide some great insight into how different stock markets performed.

The research allows users to delve into the price action for a given market, and quickly compare the performance of individual companies with the benchmark index.

Take the ASX200 as an example; we quickly selected three companies that represent major Australian industries – a bank (CBA), a miner (BHP) and a large conglomerate (WES).

The resulting performance comparison is neatly illustrated on the chart below:

IG Markets Decade of Trade


Using the interactive charting model from IG Markets, this kind of interesting hindsight analysis is readily available for 10 of the world’s major stock indices – from the UK to Japan and most markets in between.

As most investors know, “past performance is not indicative of future returns”. But understanding how different markets performed from a historical perspective can still be useful in forming an investment thesis.

For starters, comparing the performance of different companies and markets helps explain the forces driving the economies they represent.

As an example, even 10 years after the 2008 crisis, Australia’s ASX200 index still hadn’t climbed back above its pre-GFC high reached in 2007.

That’s partly because the domestic economy is heavily reliant on resources. And the prevailing decade saw the end of the mining boom, which led to a more modest performance from some major mining companies (as shown on the chart above).

Companies such as BHP have a heavier weighting on the index, which in turn weighed on the overall benchmark.

Looking across the different indices on display, the Decade of Trade data also helps users fill in the global economic picture.

For example, the DAX 30 – Germany’s manufacturing-heavy index – posted a 10-year gain of more than 200 per cent, as stimulative monetary policy in Europe helped weigh on the Euro currency which in turn helped German exports.

Conversely, Spain’s banking-focused IBEX 30 index was one of the worst performers, as local banks underperformed in a low interest-rate environment and an underperforming domestic economy.

Click on this link to get started with an interactive research experience on the IG Decade of Trade site. It’s quick, easy and – most of all – a lot of fun!

This story was developed in collaboration with IG Markets, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.