Australian equities bounced back in April after being the big underperformers in March, the latest Ausbil Dexia research shows.
Australian equities posted the highest returns of any asset class for the month of April with 5.8 per cent, eclipsing international equities which could only manage 2.6 per cent.
Ausbil attributes the resurgence of Australian equities to a sell-off of bonds and signs of a recovery in global growth which put the spotlight back on equities.
Globally, the international markets were largely resilient in April, with the Nasdaq up 15 per cent, the Dow up 8.7 per cent, while in Europe the UK, German and French markets rose more than six per cent. Asia followed in the April surge with increases above 5 per cent with the exception of Malaysia which lost ground with a 9.7 per cent fall.
But despite the strength of the international markets, the rising Aussie dollar eroded total returns in international investments. The dollar rose from $0.48 to $0.51 against the US dollar.
Asset classes which were steady were direct property, listed property trusts and cash, all with returns of within 1 per cent. Not so lucky were the bond asset classes with Australian bonds posting a 1 per cent loss, followed by international bonds and indexed bonds which lost less than one per cent.
Ausbil director Winston Sammut says the results reflect a more a positive note.
“The markets appear optimistic for the quarter ahead with expectations of a steady, gradual improvement in economic conditions,” he says.
But he adds that the Aussie dollar is likely to appreciate, thus having a similar effect on the international equity returns that were seen in April.
