Positive end to 2017

  • Most share markets ended 2017 positively, with global shares in hedged terms returning 1.1% in December, topping off a strong year (20.0%).
  • A strong earnings season and the passing of the long anticipated tax reform legislation boosted US shares in December. The S&P 500 delivered positive returns for each month of 2017 without much volatility.
  • It was also a good year for European markets, though the German and French share markets took a breather in December after political uncertainty and some easing in earnings expectations upstaged positive momentum.
  • Emerging market shares were the star performers in 2017 as a weak US dollar coupled with strong global growth boosted earnings.
  • Key central banks were encouraged by the health of economic growth. The European Central Bank announced it would start to reduce its monthly quantitative easing purchases from January while the US Federal Reserve raised rates again in December, in line with market expectations and has announced a gradual reduction in the size of its balance sheet.
  • Oil prices continued to rebound in December, crossing the US$60 a barrel mark and ended the month at the highest level since 2014.
  • Locally, Australian underemployment fell again in Q4 and at 8.3% is now well down from the Q1 2017 peak of 8.9%.

 

 Major asset class performance (%)

Asset classes 1 month 12 months 5 years (p.a.)
Australian Shares 1.9 11.9 10.2
Global Shares (hedged) 1.1 20.0 15.4
Global Shares (unhedged) -1.7 13.4 18.4
Global Emerging Markets (unhedged) 0.5 27.1 10.4
Global Small Companies (unhedged) -1.6 13.4 20.1
Global Listed Property 1.0 6.3 10.2
Cash 0.1 1.8 2.3
Australian Fixed Income -0.5 3.7 4.2
International Fixed Income 0.2 3.7 4.9
 

Source: JP Morgan & ANZ Wealth, 31 December 2017.

Indices: Australian Shares – S&P / ASX300 Accumulation, Global Shares (hedged/unhedged) – MSCI World ex Australia, Global Emerging Markets – MSCI Emerging Free Net in AUD (unhedged), Global Small Companies (unhedged) – MSCI World Small Cap ex Australia, Global Listed Property – FTSE EPRA/NAREIT Developed Rental Index ex Australia (hedged), Cash – Bloomberg Bank Bill, Australian Fixed Income – Bloomberg Composite Bond All Maturities, International Fixed Income – Barclays Global Aggregate Bond Index (hedged).

Please note: Past performance is not indicative of future performance.

 

Currency

Exchange rates At close on 31/12 % change 1 month % change 12 months
AUD/USD 0.78 3.2 8.3
AUD/euro 0.65 2.4 -4.9
AUD/yen 88.0 3.4 4.5
Trade weighted index 64.9 2.0 1.6
 

Source: Bloomberg & ANZ Wealth, 31 December 2017. All foreign exchange rates are rounded to two decimal places where appropriate.

Please note: Past performance is not indicative of future performance.


 

Disclaimer: This information is current as at 5 January 2018 but is subject to change. This information is issued by OnePath Funds Management Limited (OFM) ABN 21 003 002 800 AFSL 238342. OFM is a wholly owned subsidiary of Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522 but is not a bank. The information is general in nature and does not take into account a potential investor’s personal needs, objectives and financial circumstances. This information is not to be construed as investment or financial product advice, and should not be relied upon as a substitute for professional advice. Before acting on this information, potential investors should consider the appropriateness of the information, having regard to their objectives, financial situation and needs. Potential investors should read the relevant Product Disclosure Statement (PDS) available at onepath.com.au and consider whether the particular product is right for them. Although all the information in this document is obtained in good faith from sources believed to be reliable no representation of warranty, express or implied is made as to its accuracy or completeness. Whilst care has been taken in preparing this material, ANZ and its related entities do not warrant or represent that the information, opinions or conclusions contained in this document (“information”) are accurate. To the extent permitted by law, ANZ and its related entities do not accept any liability from the use of the information. Past performance is not indicative of future performance. The value of investments may rise or fall and the repayment of subscribed capital is not guaranteed.      
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