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20/03/2019 - Market Wrap (February 2019)
20/03/2019

Market Wrap - February 2019

Shares rebound
•    January was a more positive month for investors after December’s volatility, with shares recovering most of their late 2018 losses. Global shares rose by 7.1% and 4.1% in hedged and unhedged terms respectively.
•    US shares, having led December’s decline, performed strongly, ending the month up 7.9%. They were boosted by the US Federal Reserve’s decision to leave interest rates on hold and its dovish communications around future tightening.
•    The longest government shutdown in the US’s history, although now over, may slow GDP growth sooner than had been expected.
•    Economic growth in the eurozone has also slowed, negatively affected by political instability and trade tensions, amongst other factors.
•    The US and China, whose ongoing trade war contributed to market jitters in 2018, may be on their way to an agreement, although relations are still far from cordial.
•    China’s growth is slowing, with poor manufacturing figures and exports also down. There are also concerns about its high corporate debt, currently at 162% of GDP. Careful government policy will be required to manage the transition to a slower economy. 
•    The Australian dollar gained ground, ending the month at almost US73c, supported by rocketing iron ore prices and a softer USD.

Major asset class performance (%)

Asset classes

1 month

12 months

5 years (p.a.)

Australian Shares

3.9

1.1

7.1

Global Shares (hedged)

7.1

-4.7

9.6

Global Shares (unhedged)

4.1

3.8

  11.0

Global Emerging Markets (unhedged)

5.0

-4.8

8.6

Global Small Companies (unhedged)

 6.5

2.0

10.3

Global Listed Property

10.1

8.2

9.6

Cash

0.2

    2.0

2.1

Australian Fixed Income

0.6

5.5

4.6

International Fixed Income

1.0

3.3

4.7


Source: JP Morgan & ANZ Wealth, 31January 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).

 


Currency

Exchange rates

At close on 31/12

% change

1 month

% change 12 months

AUD/USD

0.73

3.2

-9.7

AUD/euro

0.64

3.4

  -2.1

AUD/yen

79.3

2.4

-10.0

Trade weighted index

61.6

1.5

-6.1

 

Source: Bloomberg & ANZ Wealth, 31 January 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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