In a year with some pretty crazy charts, the one below is right up there with some of the best.  After all the markets have been through this year, bot the S&P 500 and Long-Term Treasuries have seen nearly identical returns on a total return basis. That’s right, with just a few hours left in the trading year, the S&P 500’s total return in 2020 has been a gain of 17.6%, while Long Term US Treasuries, as measured by the B of A Merrill Lynch Long-Term Treasury Index has rallied 17.3%.  What makes this nearly identical performance all the more incredible is that on March 23rd, the performance gap between the two was more than 50 percentage points.

The fact that stocks and bonds have essentially seen identical returns this year isn’t typical.  The chart below shows the annual performance spread between the S&P 500 and long-term US Treasuries going back to 1978.  During that time, the S&P 500 has historically outperformed long-term US Treasuries by an average of 3.9 percentage points per year, but the average gap in performance between the two has been over 15 percentage points.  In the 43 years since 1978, there have only been seven other years where the performance spread between the two asset classes was less than five percentage points and just two years (1985 and 1992) where the performance spread was less than a percentage point.

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