Coffee crowned king of commodities

Coffee prices soared after drought in Brazil, the world's largest grower and exporter of coffee beans. Picture / Bloomberg News

The market laid plenty of traps for investors this year — here’s a look at the best and worst investments

To lose money in the markets in 2013, you had to really try. Three-quarters of the world's stocks rose, by an average of 42 per cent. The S&P 500 jumped 30 per cent.

This year, the S&P is up a further 12 per cent, but the market laid lots of traps.

You could have owned lots of energy stocks while the price of oil was plunging. Or almost anything in Russia or Eastern Europe while the ruble was in free fall.

You could have easily panicked and sold out during the intense sell-offs in late January, October and December, then missed out on the market's rebounds.

Bloomberg.com tallied the year's winning and losing investments. These are the bets that saved or ruined portfolios in 2014.

All results reflect total returns as of Monday.

US Large-cap Stocks
Best: Skyworks Solutions, +156 per cent
Worst: Sprint Corp, -61 per cent

Semiconductor company Skyworks Solutions makes the components in mobile phones and other devices that connect them to wireless internet. Last quarter, its sales were up 51 per cent year-over-year. If you'd invested US$10,000 on January 1, it would be worth US$25,630 today.

To hold on to subscribers, Sprint aggressively cut prices on its mobile phone service. It reported a profit in just one of the past four quarters. If you'd invested US$10,000 on January 1, it would be worth US$3870 today.

International Stocks
Best: Hanergy Thin Film Power Group, +249 per cent
Worst: Arrium, -89 per cent

By buying up three US solar companies and a German one, Hong Kong-based Hanergy is positioning itself as a leading maker of thin-film solar panels. If you'd invested US$10,000 on January 1, it would be worth US$34,892 today.

Mining firm Arrium's 89 per cent drop this year follows its 92 per cent rise in 2013. If you'd invested US$10,000 on January 1, it would be worth US$1110 today.

Commodities
Best: Coffee, +58 per cent
Worst: Brent Crude Oil, -45 per cent

Coffee prices soared after drought in Brazil, the world's largest grower and exporter of coffee beans. It was one of the few commodities that rose as world economic growth slowed, especially in Europe and emerging markets.

Oil's slide was exacerbated by decisions by Opec and Saudi Arabia not to cut production.

Currency
Best: The US dollar
Worst: The Russian ruble, or bitcoin

Every major currency fell against the US dollar in 2014. The euro dropped 11 per cent, the Japanese yen fell almost 12 per cent and the British pound dropped 5.6 per cent. Of non-US currencies, the Indian rupee did best, down 2.4 per cent against the dollar.

Russia's central bank last week raised a key interest rate to 17 per cent, and even that failed to stop the currency's plunge. The ruble is ending 2014 down 45 per cent against the dollar, shrinking a US$10,000 investment on January 1 into US$5513.

The bitcoin has lost 58 per cent of its value in US dollars this year, and 72 per cent since November 2013. If you'd invested US$10,000 in bitcoin at the beginning of 2014, it would be worth US$4202 today.

Exchange-traded Funds
Best: First Trust NYSE Arca Biotechnology Index Fund, +52 per cent
Worst: Market Vectors Russia Small-Cap ETF, -52 per cent

Biotech companies were popular. The First Trust fund's top holding was Incyte, which primarily makes oncology drugs and is up 52 per cent this year. If you'd invested US$10,000 in First Trust on January 1, it would be worth US$15,221 today.

Sanctions and the plunging price of oil put the Russian economy on life support. If you'd invested US$10,000 in Market Vectors Russia on January 1, it would be worth US$4793 today.

Small-cap Stock Funds
Best: William Blair Emerging Markets Small Cap Growth Fund , +12.6 per cent
Worst: Pacific Advisors Small Cap Value Fund, -23 per cent

Small-cap stocks struggled to repeat their outstanding performance in 2012 and 2013, when the Russell 2000 index rose 57 per cent. Still, about two of every three small-cap funds are up for the year. If you'd invested US$10,000 on January 1 in William Blair, it would be worth US$11,260 today. But $10,000 in Pacific Advisors would have turned into US$7663.

Bond Funds
Best: Vanguard Extended Duration Treasury Index Fund, +45 per cent
Worst: AllianceBernstein All Market Real Return Portfolio, -11 per cent

Vanguard's index fund invests in US government bonds that don't mature for 20 to 30 years. They did well in 2014, reflecting expectations that inflation will remain low for a while. If you'd invested US$10,000 in Vanguard on January 1, it would be worth US$14,506 today.

Most of the top holdings in the AllianceBernstein fund were debt issued by large energy companies, all hit hard by oil's drop. If you'd invested US$10,000 on January 1, it would be worth US$8852 today.