Thomas Dekker might not have been referring to the sharemarket when he penned his famous poem in 1599, but his description was remarkably appropriate last month. Equity markets continued their rebound during May, with global property and local shares leading the charge and all but two asset classes posting positive returns.
After strong returns through April, Emerging Markets (particularly sensitive to geopolitical risk and fear of prospective trade wars) were down materially in May, while infrastructure was down -0.1%. Overall, the Six Park portfolios gained +0.3% to +0.5% over the period and are now up between +1.3% and +2.0% over the quarter.
Six Park Portfolio Performance – May 2018
PERIOD CONSERVATIVE CONSERVATIVE BALANCED BALANCED BALANCED GROWTH AGGRESSIVE GROWTH 1 mth 0.4% 0.5% 0.4% 0.4% -0.3% 3 mths 1.3% 1.5% 1.5% 1.8% 2.0% 1 year 2.1% 3.5% 5.4% 6.5% 7.1%
(1) Past performance is not indicative of future performance.
(2) All figures are illustrative in nature based on notional $50,000 portfolios which are assumed to have been fully invested at the start of the relevant period. Your actual investment performance may vary depending on factors such as the timing of your investment with us.
(3) All figures are pre-tax but net of Six Park’s and applicable ETF fees. The results are based on closing prices for each ETF, not NAV. They assume dividend reinvestment (at month end) but do not include dividend imputation, cash holdings or annual rebalances.
ASSET CLASS PERFORMANCE
Global property was the strongest performing asset class in May, rising +1.4%. The emerging market segment was the weakest, sliding -3.3%. Despite this fall, the sector has still delivered returns of more than +8.5% over the past 12 months.
Global property returned +1.4% in May, with UK, Canadian and US real estate markets all making strong gains. After a weak start to the year, the sector has now added +9.4% in just three months, buoyed by a continued strengthening in the global economy and heightened merger and acquisition activity.
After a weak March quarter, Australian shares posted a successive month of gains, adding +1% in May. The strongest performing sectors were consumer stocks, which rallied on Amazon’s decision to stop shipping overseas goods to Australian consumers from July, and healthcare stocks, which gained on strong profit upgrades from CSL.
Fixed income added +0.8% during May. Local bonds followed the lead of global bond markets, which rallied as investors sought out defensive assets on the back of lingering US/China trade war concerns and growing political uncertainty in Italy.
Global shares were mixed but ended the month up +0.5%. US markets advanced strongly, with the S&P 500 rising +2.4% on the back of encouraging economic data (including a fall in the US unemployment rate to levels not seen since December 2000) and a solid end to the corporate earnings season. European and Japanese shares were weaker, weighed down by political uncertainty in Italy (with the appointment of a new populist government raising concerns of the country’s future in the EU) and lower than expected industrial production figures in Japan.
Global infrastructure was broadly flat for the month, with potential trade war concerns and European political uncertainty weighing on investor sentiment.
Our cash yield ETF posted another moderate gain of +0.2%. Local bank deposit rates remain muted with the RBA keeping rates on hold for a 19th consecutive month.
Emerging markets fell -3.3% in May. While Chinese and Russian equities both rallied (aided by positive economic data releases and oil price strength), those gains were more than offset by falls across other markets. Brazilian equities were especially weak as the impact of a major truck driver strike threatened to paralyse the nation’s economy.
Six Park publishes its performance returns monthly, including by portfolio and by asset class. You can view past performance reports by visiting the “Insights” section and selecting “Performance updates”.
by David Blumenthal