Each month we release a Market Wrap that is compiled by our Chief Investment Office (CIO). With various comments on the market each month, please contact your adviser if you have any questions!
A mixed bag
- After January’s bounce, February was a little quieter but still ended in positive territory, with global shares up by 3.4% and 5.6% in hedged and unhedged terms respectively.
- US shares similarly were up 3%, a more modest rise than January’s 7.9% rally, which was driven by a better-than-expected US reporting season.
- The full effects of the long US government shutdown are yet to be seen, but US GDP growth slowed significantly in the December 2018 quarter, to 2.6% following 3.4% growth in the September quarter.
- Australian shares performed well – twice as well as US shares, in fact – up 6% for the month.
- The RBA is currently forecasting growth of around 3% for the Australian economy in 2019, supported by increased business investment and public infrastructure spending.
- In the eurozone, hopes for avoiding widespread recession seem to be pinned on a strong Asian recovery, while the Brexit issue continues to cloud the UK economy.
- China-US trade relations have thawed somewhat, with Trump announcing that tariff increases on Chinese goods would be delayed, raising hopes that a trade agreement will be reached soon.
- The Australian dollar slipped slightly against all the major currencies, down to US71c and €0.62 at the end of the month.
Major asset class performance (%)
| Asset classes | 1 month | 12 months | 5 years (p.a) |
| Australian shares | 6.0 | 6.8 | 7.3 |
| Global shares (hedged) | 3.4 | 2.4 | 9.4 |
| Global shares (unhedged) | 5.6 | 10.1 | 11.7 |
| Global emerging markets (unhedged) | 2.7 | -1.3 | 9.0 |
| Global small companies (unhedged) | 6.3 | 8.8 | 11.1 |
| Global listed property | 0.2 | 15.9 | 8.6 |
| Cash | 0.2 | 2.0 | 2.1 |
| Australian fixed income | 0.9 | 6.2 | 4.7 |
| International fixed income | 0.1 | 3.7 | 4.5 |
Source: JP Morgan & ANZ Wealth, 28 February 2019. Indices: Australian shares: S&P/ASX 300 Accumulation | Global shares (hedged/unhedged): MSCI World ex Australia Net | Global emerging markets: MSCI Emerging Markets Net in AUD (unhedged) | Global small companies (unhedged): MSCI World ex Aust Small Cap | Global listed property: FTSE EPRA/NAREIT Developed Rental Index ex Australia (hedged) | Cash: Bloomberg Bank Bill | Australian fixed income: Bloomberg AusBond Composite 0+ Yr Index | International fixed income: Barclays Global Aggregate Bond Index (hedged). Please note: Past performance is not indicative of future performance.
Currency
| Exchange Rates | At close 28/02 | % change 1 month | % change 12 months |
| AUD/USD | 0.71 | -2.5 | -8.6 |
| AUD/euro | 0.62 | -1.8 | -2.0 |
| AUD/yen | 79.0 | -0.2 | -4.6 |
| Trade weighted index | 60.5 | -1.5 | -4.6 |
Source: Bloomberg & ANZ Wealth, 28 February 2019.All foreign exchange rates are rounded to two decimal places where appropriate. Please note: Past performance is not indicative of future performance.
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