News

Over the month of February, the economic data that was released showed mixed results and share markets were volatile. However, optimism over medium-term growth and the global economic recovery continues to outweigh short-term concerns. Falling COVID-19 cases and vaccine deployment has reduced restrictions and economies are expected to reopen soon.

Over the month of January, economic data signalled a short term hit due to pandemic-related restrictions. This overshadowed a strong fourth quarter experienced by China. The continued global roll-out of COVID-19 vaccines in various countries continues to underpin the expected rebound of markets in 2021. The smooth transition of Brexit and the beginning of Biden’s…

Over the month of December, markets broadly achieved positive returns as vaccine roll-outs and another fiscal stimulus package in the US offset bad news on the virus front. Restrictions tightened in many countries as new COVID-19 cases across the developed world surged, as a new more infectious COVID-19 strain began to spread globally. However, vaccination programs have given markets hope that economies will fully reopen over the next year.

While COVID-19 cases continued to soar in the US, UK and Continental Europe over November, markets shrugged off short-term developments and soared on the back of positive vaccine news and the US presidential election results. Domestic and developed overseas share markets achieved strong positive returns for the month, with outperformance in sectors that are expected to benefit from a removal in restrictions next year, such as energy.

Overseas shares posted negative returns in October 2020 as fears of a slowdown in the recovery materialised with onerous restrictions being re-imposed amid resurgence in COVID-19 cases. Overseas shares fell back into negative territory returning -3.2%, in hedged terms, over October. Global economic data for Q3 is showing a rebound from a similar sized economic collapse but forward looking data is already indicating another slowdown ahead, especially in Europe and the United Kingdom (UK) as further cases have brought back restrictions.

Over the month of September, markets experienced a reversal in investor sentiment. Apart from Overseas Small Caps and Emerging Markets, which returned 1.0% and 1.5% respectively for the month, equity markets broadly experienced negative returns.

For the month of August, growth assets performed well as investor momentum remained strong. Economic data continued to be encouraging with another strong set of US nonfarm payrolls. As the world continues to open up, retail sales for the US, UK and Eurozone are now back at pre-COVID-19 levels, following the worst quarterly GDP declines on record for most countries. Purchasing manager indices remain in expansionary territory. Australian small caps was the strongest performing equity market, returning 7.2% over August whilst overseas hedged investors realised greater relative gains from the continued appreciation of the Australian Dollar.

The month of July generally saw positive returns across asset classes, as growth assets continue to gain. Emerging Markets were the strongest performing market in equities, with the MSCI EM Index (UH) returning 4.6% over the month. On the domestic front, Australian small caps outperformed large caps and overseas hedged investors realised greater gains from the appreciation of the Australian dollar.

Growth assets continued to recover over June, but at a slower and more volatile pace than in May. Markets were encouraged by the gradual reopening across the developed world and by economic activity indicators, such as non-farm payrolls, but the optimism was tempered by evidence of the pandemic regaining pace in the US and some large emerging market countries such as India and Brazil.

Following the strong rebound in risk assets over April, the recovery continued into the month of May. Markets were encouraged by the slowdown in new COVID-19 cases and the gradual relaxation of lockdown restrictions across a number of US states, European countries and the United Kingdom.

The fiscal and monetary stimulus packages implemented by governments and central banks globally have helped markets rebound fairly strongly over the month of April. Central bank interventions and massive asset purchase programs, including high yield bonds and direct lending to companies, helped restore liquidity in the global financial system.

COVID-19 has continued to spread rapidly around the world and was declared a global pandemic by the World Health Organisation. This has caused a severe shock to the global economy and financial markets have responded with sharp drops in share prices, a rise in credit spreads and a flight to defensive assets over March.

Coronavirus fears drove losses across equity markets and sparked a flight to defensive assets over February. Global equity markets reached fresh highs in mid February, then sold off sharply alongside other risky assets shortly thereafter. The sell-off in markets stem from investor concerns regarding the spread of COVID-19, with an acceleration in reported cases outside mainland China, specifically in Italy, Iran and South Korea and the ramifications on global economic growth.

Global shares closed out the month with losses after reaching fresh highs in mid January 2020. Market sentiment has deteriorated since the coronavirus outbreak in mid January and its potential impacts. Emerging Markets suffered, specifically Latin America and China lagged in anticipation of economic growth fallout. Whilst UK and Japanese share markets fell, US shares…

Global equity markets staged a strong finish to 2019, with investors favouring riskier assets amidst declining trade war concerns and easing geopolitical tensions. US equities posted solid returns over December, as Hedged Overseas Developed Shares increased by 2.3%.

Equity markets extended their rally in November with major indices reaching new highs. Markets were encouraged by reported progress on trade negotiations between the US and China, coupled with stable economic readings in the US and initial signs that growth deterioration in Europe may have bottomed.

Equity markets returned mixed results during October. The US equity market rallied higher with major US indices reaching fresh highs. Hedged Overseas Developed Shares increased by 1.8% over the month. Markets were encouraged by the progress made on the US-China trade negotiations front and economic readings, which suggest that global growth may have stabilised.

Equity markets rebounded over September, closing out a mixed and volatile third quarter with Hedged Overseas Developed Shares increasing by 2.3%. Investors looked past global trade friction, softer global manufacturing activities and macro uncertainties, with additional monetary stimulus helping to alleviate investor concerns.

Volatility returned to markets in August, driving equities lower while safe-haven assets enjoyed solid gains. The downturn in equity markets was largely driven by increased trade tensions and geopolitical uncertainties.

Global equities increased modestly in July, with Overseas Developed Shares rising 1.1% in hedged terms. US equities in particular reached fresh highs in the second half of July, largely driven by technology stocks, however markets pulled back following an indication from the US Federal Reserve (Fed) that the 0.25% rate cut, to a range of 2.00% to 2.25%, was not necessarily the beginning of an easing cycle.

Global equities rebounded in June following the sharp sell-off in May, with overseas developed shares rising 5.9% in hedged terms. Progress on trade talks and strong indications from central banks to move to more accommodative monetary policy supported the risk-on environment for investors.

Global equities experienced a sharp sell-off during May, with Overseas Developed Shares falling 6.0% in hedged terms. The turnaround in market sentiment, from the first four months of the year, was sparked by increased trade tensions between the US and China, as well as President Trump’s announcement of tariffs on Mexico.

Global equities continued to rally during April, as overseas developed shares increased 3.9% in hedged terms over the month.

Global equity markets continued their run of positive performance into March 2019, as overseas developed shares increased 1.7% in hedged terms.

Growth investors would prove well positioned over February 2019 as the majority of equity markets experienced positive returns, continuing their rebound in performance from the previous month.

The year 2019 began with a rebound in returns across a majority of growth asset classes, following significant drawdowns in equity markets and weak performances across most other growth asset classes during the fourth quarter of 2018.