Global markets continue rising
- Global shares rose 4% and 3.2% in hedged and unhedged terms, respectively. The rotation to stocks benefitting from a strong economic recovery faltered in April. Strong profit results for major US tech companies such as Google saw growth sectors such as technology outperform.
- Australian shares underperformed global shares slightly, rising 3.5% in April. The leading sectors were technology (up 9.7%) and miners (up 6.8%). Energy (down 4.9%), Consumer Staples (down 2.6%) and Utilities (down 1.2%) were the only areas of the market to fall in April. Consumer Staples struggled as sentiment soured on Woolworths amidst slowing sales. Board turnover and scepticism over its demerger dragged on the AGL share price and the Utilities sector.
- The Australian dollar (AUD) rose 0.8% against major currencies and 1.6% against the US dollar.
- Fixed income returns improved as bond yields fell. Australian bonds benefitted from the RBA commitment to keeping rates lower until at least 2024. In the US, a similar commitment to keep rates low by the Federal Reserve also saw supported bond returns.
As the pandemic lingers
- Coronavirus vaccine progress has proceeded in a welcome fashion. After initial logistical challenges, EU vaccinations are climbing, contributing to a decline in coronavirus cases.
- The coronavirus pandemic has escalated in India sparking lockdowns and a national crisis with the death toll climbing at an alarming rate and sparking travel bans around the world including Australia.
- The Global Composite PMI survey (a proxy for economic activity) rose to an eleven-year high in April suggesting the global economic recovery is continuing.
- The RBA left interest rates unchanged in its May meeting at 0.1% and flagged staying at this level until 2024.
- The unemployment rate fell to 5.6% in March, continuing to decline from its high of 7.5% in July thanks to continued strong jobs growth with job vacancies also rising. April figures should highlight how well the jobs market has handled the end of JobKeeper in March.
- Australia’s vaccination program continues albeit at a slower pace with 2.6m doses administered as of early May.
- Potential small outbreaks occurred in both Sydney and Perth triggering new restrictions but do not appear to be escalating at this juncture.
Major asset class performance
|Asset classes||1 month
|5 years (p.a.) %|
|Global shares (hedged)||4.0%||40.6%||13.8%|
|Global shares (unhedged)||3.2%||23.0%||13.8%|
|Global small companies (unhedged)||2.6%||40.6%||13.6%|
|Global emerging markets (unhedged)||1.1%||26.0%||12.2%|
|Global listed property (hedged)||5.7%||29.1%||4.9%|
|Australian fixed income||0.6%||-1.2%||3.5%|
|International fixed income||0.2%||-0.1%||3.3%|
|Source: Bloomberg & IOOF, 30 April 2021|
Indices used: Australian Shares: S&P/ASX 200 Accumulation Index, Global shares (hedged): MSCI World ex Australia Net Total Return (in AUD), Global shares (unhedged): MSCI World ex Australia Hedged AUD Net Total Return Index; Global small companies (unhedged): MSCI World Small Cap Net Total Return USD Index (in AUD); Global emerging markets (unhedged): MSCI Emerging Markets EM Net Total Return AUD Index; Global listed property (hedged): FTSE EPRA/NAREIT Developed Index Hedged in AUD Net Total Return; Cash: Bloomberg AusBond Bank Bill Index; Australian fixed income: Bloomberg AusBond Composite 0+ Yr Index; International fixed income: Bloomberg Barclays Global Aggregate Total Return Index Value Hedged AUD
Please note: Past performance is not indicative of future performance
|Exchange rates||At close on 30/4||1 month
|Trade weighted index||64.4||0.8%||11.4%|
|Source: Bloomberg & IOOF, 30 April 2021|
All foreign exchange rates are rounded to two decimal places where appropriate.
Please note: Past performance is not indicative of future performance.
For specific advice customised to your individual circumstances, contact Carrick Aland’s Wealth planning team on 07 4669 9800 or visit carrickaland.com.au/wealth-planning/.
Disclaimer: This report has been prepared by the IOOF Research team for Millennium3 Financial Services Pty Ltd ABN 61 094 529 987, AFSL 244252. Millennium3 Financial Services Pty Ltd is a company within the IOOF group of companies consisting of IOOF Holdings Limited ABN 49 100 103 722 and its related bodies corporate. This report is current as at the date of issue but may be superseded by future publications. The information in the report may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of Millennium3 Financial Services Pty Ltd. This report may be used on the express condition that you have obtained a copy of the Millennium3 Financial Services Pty Ltd Financial Services Guide (FSG) from the website. Millennium3 Financial Services Pty Ltd and/or its associated entities, directors and/or its employees may have a material interest in, and may earn brokerage from, any securities or other financial products referred to in this report, or may provide services to the companies referred to in this report. This report is not available for distribution outside Australia and may not be passed on to any third person without the prior written consent of Millennium3 Financial Services Pty Ltd. Millennium3 Financial Services Pty Ltd and associated persons (including persons from whom information in this report is sourced) may do business or seek to do business with companies covered in its research reports. As a result, investors should be aware that the firms or other such persons may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as a single factor in making an investment decision. This report has been prepared in good faith and with reasonable care. Neither Millennium3 Financial Services Pty Ltd nor any other person makes any representation or warranty, express or implied, as to the accuracy, reliability, reasonableness or completeness of the contents of this document (including any projections, forecasts, estimates, prospects and returns and any omissions from this document). To the maximum extent permitted by law Millennium3 Financial Services Pty Ltd, its related bodies corporate and their respective officers, employees, representatives and associates disclaim and exclude all liability for any loss or damage (whether foreseeable or not foreseeable) suffered or incurred by any person acting on any information (including any projections, forecasts, estimates, prospects and returns) provided in, or omitted from this report. General Advice Disclaimer: The information in this report is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this report, you should assess your own circumstances or seek advice from a financial adviser. Where applicable, you should obtain and consider a copy of the Product Disclosure Statement, prospectus or other disclosure material relevant to the financial product before you acquire a financial product. It is important to note that investments may go up and down and past performance is not an indicator of future performance. For information regarding any potential conflicts of interest and analyst holdings; IOOF Research Team’s coverage criteria, methodology and spread of ratings; and summary information about the qualifications and experience of the IOOF Research Team please visit https://www.ioof.com.au/adviser/investment_funds/ioof_advice_research_process.