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!
A steady start
- Most share markets started the year in positive territory as earnings expectations rose and on stronger economic data.
- Bonds yields rose in most major markets as measures of headline inflation rebounded. The bond market also digested prospects of tapering in Europe and balance sheet normalisation in the US.
- The US dollar (USD) weakened against most cross rates and emerging market currencies. The Australian dollar (AUD) rose strongly which impacted unhedged returns.
- Emerging market shares and bonds performed well following a weaker USD, stronger export growth and higher commodity prices. However, these markets remain vulnerable to US political developments across trade and tax reform.
- In China, Q4 GDP growth printed at 6.8% which was ahead of most analyst expectations. As the economy breaks for Lunar New Year, the government reaffirmed its commitment to supply side reform and monetary stimulus.
- Australian economic indicators improved following a rise in building approvals and household credit growth. Q4 CPI showed a stabilisation in core inflation measures at 1.5% which should prompt the Reserve Bank of Australia to keep rates on hold in February.
Major asset class performance (%)
| Asset classes | 1 month | 12 months | 5 years (p.a.) |
| Australian Shares | -0.8 | 17.3 | 10.4 |
| Global Shares (hedged) | 1.4 | 18.3 | 14.5 |
| Global Shares (unhedged) | -2.3 | 8.9 | 17.7 |
| Global Emerging Markets (unhedged) | 0.6 | 16.9 | 7.2 |
| Global Small Companies (unhedged) | -2.4 | 16.5 | 19.3 |
| Global Listed Property | -0.6 | 9.3 | 12.4 |
| Cash | 0.2 | 2.0 | 2.7 |
| Australian Fixed Income | 0.6 | 2.3 | 5.1 |
| International Fixed Income | -0.3 | 3.3 | 5.8 |
| Source: JP Morgan & ANZ Wealth, 31 January 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. |
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Currency
| At close on 31/12 | % change 1 month | % change 12 months | |
| AUD/USD | 0.76 | 4.8 | 7.3 |
| AUD/euro | 0.70 | 2.3 | 7.5 |
| AUD/yen | 85.46 | 1.2 | -0.2 |
| Trade weighted index | 65.8 | 2.9 | 7.0 |
| Source: Bloomberg & ANZ Wealth, 31 January 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 3 February 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.