Global developed equities, both large and small caps, were the key performers over September 2017, as consumer confidence bolstered following a subdued August. Strong gains in the energy sector as well as increased confidence in financials were the primary drivers of performance.
The broad Australian equity market was mixed over September, as the S&P/ASX 300 Index remained flat for the month. The highest positive performer was the S&P/ASX Small Ordinaries Index, increasing 1.3%, while the S&P/ASX 50 Index was the weakest performer, falling 0.2% over the month. The best performing sectors were Healthcare (+2.3%) and Real Estate (+1.2%). The weakest performing sectors were Telecom Services (-4.5%) and Utilities (-3.6%). The largest positive contributors to the return of the index were NAB, Westpac and CSL, with absolute returns of 4.9%, 2.6% and 4.3% respectively. In contrast, the most significant detractors from performance were BHP, Telstra and Fortescue Metals with absolute returns of -5.6%, -4.2% and -13.9% respectively.
The broad MSCI World ex Australia (NR) Index was up 2.5% in hedged terms and 3.4% in unhedged terms over the month, as the Australian dollar (AUD) fell against the US dollar (USD). The strongest performing sectors were Energy (+10.1%) and Financials (+5.1%), while Utilities (-1.4%) and Real Estate (-0.1%) were the worst performers. In AUD terms, the Global Small Cap sector increased by 5.1% while Emerging Markets increased by 0.7%. Over September, the NASDAQ increased 1.0%, the S&P 500 Composite Index rose by 2.1% and the Dow Jones Industrial Average increased by 2.2%, all in US dollar terms. In local currency terms, major European equity markets experienced mixed returns as the CAC 40 (France) increased 4.9% and the DAX 30 (Germany) increased 6.4%, while the FTSE 100 (United Kingdom (UK)) fell by 0.7%. In Asia, the Japanese TOPIX rose 4.3% over September, while the SSE Composite (China) was down 0.4% and the Hang Seng Index decreased 1.2%. The Indian BSE 500 decreased 1.1% over September.
The AUD movement was mixed over September, finishing with a decreased Trade Weighted Index of 66.2 on 30 September 2017. The AUD depreciated against the USD (-1.1%) and the Pound Sterling (-4.4%) but appreciated against the Euro (+0.1%) and the Yen (+1.2%). On a trade-weighted basis, the local currency decreased 0.2% over the month.