The rise of ‘Big Tech’ helped New York’s NASDAQ (^IXIC) stock index claim the crown of best investment of the last decade.
Analysts at Deutsche Bank said Thursday the NASDAQ index had the highest returns of any major asset globally during the 2010s. The tech-heavy stock index rose 346.9% between 1 January 2010 and 31 December 2019.
The NASDAQ benefitted from the rise of the so-called ‘FAANGs’ during the last decade: Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (GOOG). The rapid growth of these consumer-facing tech companies led investors to coin the acronym ‘FAANGs’ and the five stocks were often bought together.
Netflix’s stock surged over 4,200% in the last ten years, Amazon’s stock has risen over 1,300%, Apple’s share price has risen over 850%, and Google’s parent company Alphabet climbed almost 350% during the period. Facebook has risen over 400% since going public in 2012.
While tech helped the NASDAQ beat rivals on performance, analysts at Deutsche Bank said the strong performance for equities more generally was “the story of the decade”.
“The top 7 performers in local currency terms are all equity indices,” analysts wrote in a note to clients. “US equities led the way with the NASDAQ and the S&P 500 up +346.9% and +256.4%, respectively, with Russia’s Micex (+250.3%) and the Nikkei (+171.3%) behind them.”
After diving in 2008 as the financial crisis broke, global equity markets began a record bull market in 2010 that is still going on. Analysts expect the stocks to continue to outperform bonds in 2020 but are increasingly wary about when the rally will come to an end.
Notable underperforming assets over the last ten years include oil and the pound against the US dollar. The worst investment of the last decade was the Greek stock exchange, which declined by almost 50% in the wake of the sovereign debt crisis. The Athens Exchange rebounded in 2019 to become the best performing major asset globally.