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Reflating away

  • Share markets continued to benefit from the global synchronised recovery in growth and corporate earnings.
  • Bond yields fell following some slowing in economic momentum as lead indicators consolidate.
  • The US Federal Reserve raised interest rates by 25 basis points but remains cautious on the growth outlook.
  • The US dollar gained slightly against major cross rates along with the yen while the Australian dollar fell as commodity prices declined.
  • Emerging market shares and bonds continued to perform well as investment flows return to long- run average levels. The decline in energy and commodity prices has raised some questions regarding the durability of the reflation trade.
  • In China, authorities remain committed to growth and supply side reform after the meeting of the National People’s Congress. Industrial activity and stronger construction should carry growth comfortably above the government’s target of 6.5% in the first half of 2017.
  • Australian economic indicators are generally supportive of growth although employment remains soft given the sharp rise in the unemployment rate to 5.9% from 5.7% and wages remain tepid. The property market remains a standout and a concern for policy makers as capital city price growth reflects strong investor demand.


Major asset class performance (%)

Asset classes 1 month 12 months 5 years (p.a.)
Australian Shares 3.3 20.2 10.8
Global Shares (hedged) 1.0 18.8 13.8
Global Shares (unhedged) 1.8 15.6 16.4
Global Emerging Markets (unhedged) 3.3 18.2 7.2
Global Small Companies (unhedged) 1.5 18.9 17.9
Global Listed Property -1.9 2.7 11.4
Cash 0.2 1.9 2.7
Australian Fixed Income 0.4 2.1 5.1
International Fixed Income 0.0 2.2 5.8
Source: JP Morgan & ANZ Wealth, 31 March 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.





Exchange rates At close on 31/3 % change 1 month % change 12 months
AUD/USD 0.76 -0.4 1.1
AUD/euro 0.72 -1.1 8.0
AUD/yen 84.98 -1.6 2.1
Trade weighted index 66.2 -0.7 3.6

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

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

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Disclaimer: This information is current as at 6 April 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.