Each month we release the Market Wrap that is compiled by our Chief Investment Office (CIO). Please call us to discuss any points which you find of interest!
Off to a good start
- Share markets started the year positively, with global shares in hedged terms returning 3.8%. The US led the way as good earnings news saw the market hit new highs before pulling back at the end of the month.
- The US dollar’s decline accelerated. This followed US Treasury comments that a weaker USD would support the US economy.
- The falling USD contributed to gains in commodity prices and a rise in the AUD. While the Australian share market fell slightly in the month, resources stocks showed strength and kept the ASX 200 comfortably above 6,000.
- A robust labour market is likely fuelling Australian consumer confidence, which hit a multi-year high in January, despite a slight rise in the unemployment rate to 5.5%.
- The euro zone has picked up further, bolstered by strong business conditions. The ECB’s December bank lending survey also showed stable or easing lending standards and rising credit demand. While the UK continues to navigate through Brexit issues, unemployment is now at a 42-year low of 4.3%.
- China posted a Q4 GDP growth figure of 6.9%, slightly ahead of forecasts. Emerging market shares maintained strong performance in January, driven in part by the weaker USD.
Major asset class performance (%)
| Asset classes | 1 month | 12 months | 5 years (p.a.) |
| Australian Shares | -0.4 | 12.4 | 9.0 |
| Global Shares (hedged) | 3.8 | 22.9 | 15.0 |
| Global Shares (unhedged) | 1.8 | 18.2 | 17.8 |
| Global Emerging Markets (unhedged) | 4.6 | 32.2 | 11.2 |
| Global Small Companies (unhedged) | 0.0 | 16.3 | 18.9 |
| Global Listed Property | -2.6 | 4.3 | 8.9 |
| Cash | 0.2 | 1.8 | 2.3 |
| Australian Fixed Income | -0.3 | 2.8 | 4.1 |
| International Fixed Income | -0.7 | 3.2 | 4.9 |
|
Source: JP Morgan & ANZ Wealth, 31 January 2018. 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 31/01 | % change 1 month | % change 12 months |
| AUD/USD | 0.81 | 3.2 | 6.2 |
| AUD/euro | 0.65 | -0.3 | -7.6 |
| AUD/yen | 88.0 | -0.1 | 2.8 |
| Trade weighted index | 65.6 | 1.1 | -0.3 |
|
Source: Bloomberg & ANZ Wealth, 31 January 2018. 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 February 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.