Bull run continues for Australian shares

By Darin Tyson-Chan

The outstanding performance of the Australian equities market was maintained for March 2006, with the domestic share market reaching record highs during the month.

The latest Mercer Sector Survey shows the S&P/ASX 300 Index experienced an increase of 4.8 per cent in March.

The sustained bull run was again driven by strong commodity prices combined with a rise in mergers and acquisitions and earnings upgrades.

The materials and energy sectors performed particularly well during March, producing gains of 12.5 per cent and 10.4 per cent respectively.

The month also saw retail sales and consumer confidence climb as the 5.2 per cent return delivered by the consumer discretionary sector indicated.

The survey also showed fund managers in the space produced good results over the 31-day period, with the vast majority outperforming the benchmark delivering a median return of 5.3 per cent. Active managers and those involved in the socially responsible investment area produced the best returns in March delivering a median figure of 5.4 per cent.

March saw international share markets strengthen as well, with the MSCI World Index’s (ex Australia) unhedged return of 6.5 per cent representing the biggest gain in one month since February 2000.

Mercer’s survey found the solid results achieved on the global scene were due mainly to economic growth, rising company profits and stronger commodity prices.

The report also uncovered multi-decade highs for several major market indices including the Dow, FTSE 100 and the Nikkei.

Like their domestic sector peers, international equities fund managers also performed well on the whole, delivering higher than index returns resulting in a median return of 6.7 per cent. Value-biased managers were the pick of the bunch producing the highest median return in the sector of 6.8 per cent.