Each month we release the Market Wrap that is compiled by our Chief Investment Office (CIO). Please do not hesitate to contact your adviser to discuss any points which you find of interest!

 

Steadiness continues

  • Most share markets performed well as earnings growth remained supported by ongoing recovery across the global economy.
  • Bond yields fell as investors reduced short positions, and due to increased European political uncertainty. Comments by New York Federal Reserve President William Dudley suggest a US rate hike in March is likely.
  • The US dollar (USD) gained slightly against major cross rates as did the Australian dollar (AUD), which benefitted from higher iron ore prices.
  • Emerging market shares and bonds continued to outperform due to rising exchange rates and stronger trade activity. Investment flows towards this region have been strong, especially on the equity side.
  • In China, credit growth remained strong as leading indicators improved. Domestic activity remains supported by lower real interest rates as inflation has lifted. The first annual meeting of the National People’s Congress in March is set to deepen the government’s commitment on supply side reform and sustainable growth.
  • Australian economic indicators improved as business confidence rose. Unemployment was steady at 5.7% although jobs growth was mainly in part time work. Q4 GDP surprised due to a large lift in export growth.

 

Major asset class performance (%)

Asset classes 1 month 12 months 5 years (p.a.)
Australian Shares 2.2 22.0 10.4
Global Shares (hedged) 3.2 23.7 14.0
Global Shares (unhedged) 1.5 12.4 17.3
Global Emerging Markets (unhedged) 1.8 20.3 6.6
Global Small Companies (unhedged) 0.8 17.8 18.8
Global Listed Property 3.2 13.0 12.9
Cash 0.1 2.0 2.7
Australian Fixed Income 0.2 1.4 5.1
International Fixed Income 0.9 3.1 5.8
Source: JP Morgan & ANZ Wealth, 28 February 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 28/2 % change 1 month % change 12 months
AUD/USD 0.77 0.9 5.0
AUD/euro 0.70 3.0 7.9
AUD/yen 86.35 0.9 4.3
Trade weighted index 66.7 1.4 7.4
Source: Bloomberg & ANZ Wealth, 28 February 2017. All foreign exchange rates are rounded to two decimal places.

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

Disclaimer: This information is current as at 7 March 2017 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. RI Advice Group Pty Ltd | ABN 23 001 774 125 AFSL 238429.