ANZ Smart Choice Super Investor Update : Member Update Spring 2014
9 Australian shares The Australian share market underperformed global shares, falling 5.4% in September to be down 0.6% for the quarter. The waning of the search for yield theme, alongside concerns over the impact of slowing Chinese growth, saw investors exit the Australian market. Global shares Global shares rose 1.5% in hedged Australian dollar (AUD) terms over the quarter. The US (S&P 500 Index) recorded its seventh quarterly gain, rising by 0.6%. Japan’s Nikkei rallied 6.7% as the weaker Yen was perceived as positive for Japanese corporate earnings. Meanwhile, the decline in the AUD meant that global shares recorded a strong gain of 5.7% on an unhedged basis. Global fixed interest Global fixed income markets were up 1.8% in hedged AUD terms in the quarter, and a strong 8.1% for the year. Bond yields fell on slower global growth and a decline in investors’ expectations for the outlook for inflation. There was an especially large decline in European yields as the ECB lowered interest rates and announced it would introduce its own QE. Late in the quarter, global fixed income markets fell as markets focused on the potential rise in US short-term rates. Australian fixed interest The Australian fixed income market underperformed global fixed income with a 1% rise in the quarter. The underperformance was driven in part by a waning of the search for yield theme, which saw investors shun local bonds in favour of US dollar assets in September. Listed property After a substantial slowdown in the search for yield thematic this quarter, global listed property fell 1.7% after a sell-off in September. On an annual basis, it is still up 11.1%. Currency The AUD came under pressure reflecting the combination of US dollar strength as investors moved to anticipate rate rises in 2015 and concerns over Chinese growth. While the AUD fell against most major currencies it was markedly lower against the greenback, down 7% in the quarter to end at US87.5c. 99 Outlook for the remainder of 2014 While risks to the outlook have risen, we continue to anticipate a moderate expansion in global growth given the solid foundations to the US recovery, which should lend support to other regions. With the end of QE in the US imminent and rate rises there in 2015 likely, we are increasingly aware of the risks within the market. Our focus remains on quality growth assets such as developed market shares and limiting exposure to higher risk and less liquid assets such as emerging market shares and the AUD.
Member Update Summer 2015
Member Update Winter 2014