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Market Wrap

Wall Street leads shares higher

  • Global shares rose 1.5% and 4.1% in hedged and unhedged terms respectively. Developed markets remained solid, while emerging market shares remain under downward pressure.
  • Global share returns were pushed higher by strong returns to US shares. The S&P 500 rose 3% supported by strong earnings.
  • Meanwhile major bourses in Europe fell as political risks in Italy and trade war concerns dominated sentiment.
  • Trade tensions and the strong US dollar continued to weigh on emerging markets. The MSCI Emerging Markets index was flat.
  • Despite the leadership spill locally, Australian shares performed strongly with the market supported by a solid reporting season and signs that the RBA will be on hold for some time.
  • US Fed Chairman Powell indicated that considerable uncertainty is attached to the underlying economic drivers. The Fed will watch the data flow and are not necessarily set on a pre-determined tightening path. Markets expect another rate rise in September.
  • In Europe, the Bank of England voted unanimously to raise rates by 25 basis points to 0.75% as employment is at a record high and real wages are picking up.

Major asset class performance (%)

Asset classes 1 month 12 months 5 years (p.a.)
Australian Shares 1.4 15.5 8.9
Global Shares (hedged) 1.5 14.7 13.3
Global Shares (unhedged) 4.1 24.3 15.1
Global Emerging Markets (unhedged) 0.0 8.9 9.5
Global Small Companies (unhedged) 5.1 27.7 16.3
Global Listed Property 1.8 7.5 11.0
Cash 0.2 1.9 2.2
Australian Fixed Income 0.8 3.8 4.5
International Fixed Income 0.3 0.8 4.9
Source: JP Morgan & ANZ Wealth, 31 August 2018.          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 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.

Currency

Exchange rates At close on 31/8 % change

1 month

% change 12 months
AUD/USD 0.72 -3.2 -9.5
AUD/euro 0.62 -2.4 -7.1
AUD/yen 79.8 -3.9 -8.7
Trade weighted index 62.2 -2.1 -6.2
Source: Bloomberg & ANZ Wealth, 31 August 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 31 August 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.