self-managed superannuation fund administrators

Market Wrap July 2018

Trade concerns flatten returns

  • Share markets delivered solid returns in June. However, the gap between robust returns across most developed markets and weak returns in emerging markets continued. Australian equities continue to perform strongly.
  • While the fundamentals remain supportive, steady tightening by the US Federal Reserve (Fed) and a further escalation in trade wars has dented returns, particularly for emerging markets which fell -1.8% this month.
  • Reflecting these concerns the Australian dollar has fallen sharply which contributed to the strong performance of unhedged global equities this month.
  • The strong returns in Australian fixed income reflected subdued Australian wages and inflation and expectations that the Reserve Bank of Australia will be on hold for some time.
  • US economic momentum has recovered solidly from the soft patch in the first quarter and this supported the Fed to tighten again.
  • Euro zone economic momentum has slowed likely reflecting the headwinds from a further escalation in trade wars.
  • The Reserve Bank of Australian left interest rates on hold. This reflected the balance of weak wages and inflation growth and a further softening in housing data. Despite these headwinds confidence measures remain above trend and the earnings outlook has brightened.


Major asset class performance (%)

Asset classes1 month12 months5 years (p.a)
Australian shares3.213.210.0
Global shares (hedged)0.311.512.9
Global shares (unhedged)2.315.414.9
Global emerging markets (unhedged)-1.812.39.6
Global small companies (unhedged)
Global listed property2.75.59.4
Australian fixed income0.53.14.4
International fixed income0.21.95.0

Source: JP Morgan & ANZ Wealth, 30 June 2018.
Indices: Australian Shares – S&P / ASX 300 Accumulation, Global Shares (hedged/unhedged) – MSCI World ex Australia Net, 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 AusBond Composite 0+ Yr Index, International Fixed Income – Barclays Global Aggregate Bond Index (hedged). 
Please note: Past performance is not indicative of future performance.​



 At close 30/06% change 1 month% change 12 months
Trade weighted index62.6-0.3-4.4

Source: Bloomberg & ANZ Wealth, 30 June 2018. 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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Jon.Rancie CFP ® Adv.Dip.FS (Financial Planning)


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