Global equities top Aussie peers for 2019
While sentiment around global markets was fairly negative in the last quarter of 2018, data from FE Analytics shows the global equity market has surpassed its Australian counterpart in 2019, and chief analyst of Wealth Within, Dale Gillham, said there’s no reason why major world markets would not continue to do so into mid this year.
According to data from FE Analytics, for the year to 24 April, the MSCI AC World Index has returned 15.18 per cent, with the S&P ASX 300 sitting a few steps behind with 13.49 per cent.
Global equities returned, on average, 12.75 per cent, while their Australian counterparts reutnred 11.69 per cent.
So, while not a huge difference, it’s clear global equities are enjoying slightly better returns this year, with the top performing fund, the CFS FirstChoice Acadian Wholesale Geared Global Equity fund, returning 25.84 per cent.
In fact, the five top performing funds were all global equity funds, with the top performing Australian equity fund, the DDH Selector Australian Equities fund, sitting in seventh position with returns of 21.03 per cent.
Commenting on the market, Gillham said over the past year, we saw a lot of volatility in world markets caused by several geopolitical influences like tensions between the US and North Korea, and the US-China trade war.
“Both of these situations seem to be less of an issue today, and volatility in markets is now settling, as we have seen the CBOE Volatility Index (VIX) drop over 20 per cent since December 2018 and the VIX is over 31 per cent lower than it was in February 2018,” he said.
And if volatility remains low, Gillham said, then overall, world markets should still continue to rise in what he believes is a sustainable uptrend.
“That said, I would like to see markets soften for at least a couple of weeks to build support for a further sustainable rise.”
The chart below tracks the performance of the global index, the MSCI AC World Index, and the S&p ASX 300, as well as the global and Australian equities sectors for the year to 24 April 2019.
AUTHOR
Anastasia Santoreneos
Recommended for you
Natixis Investment Managers has hired a distribution director to specifically focus on the firm’s work with research firms and consultants.
The use of total portfolio approaches by asset allocators is putting pressure on fund managers with outperformance being “no longer sufficient” when it comes to fund development.
With evergreen funds being used by financial advisers for their liquidity benefits, Harbourvest is forecasting they are set to grow by around 20 per cent a year to surpass US$1 trillion by 2029.
Total monthly ETF inflows declined by 28 per cent from highs in November with Vanguard’s $21bn Australian Shares ETF faring worst in outflows.
