Page 7 - Renshaw, M&T - review report - Febr21
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International equities domestically and globally, rose slightly
during the quarter as confidence grew off
All major developed and emerging the back of vaccine news. Bond returns
markets, although performing well for the were again however muted in the
quarter, underperformed the Australian December quarter. Australian bonds
market due to the continuing rise in the (Bloomberg AusBond Govn 0+Yr) hit
Aussie dollar. In the US, the lead-up to and negative territory on a real basis (-0.3%)
US Election, or more of note, the outcome, whilst global bonds (BBgBarc Global
proved to be the trigger to set-off market Aggregate TR Hedged) were slightly
uncertainty and volatility not only locally, positive (+0.8%). Corporate bonds
but globally. Coupled with second and third squeezed a little more spread during the
waves of COVID-19 running rampant quarter and continued to outperform
across the world, the December quarter government bonds; Higher yielding bond
will be one spoken about in years to come; assets remained broadly buoyant with
the S&P 500 managed however to return a cooperative monetary policy in place; Cash
solid (+4.0%) in AUD terms as optimism yields took another hit as the RBA cut the
gained traction as a result of a large fiscal official rate in November to its lowest in
spending US Democratic party winning history, dropping to 0.10%.
office. Emerging Markets (as measured by
the MSCI EM index) returned a strong It’s fair to say the December quarter of
(+11.2%); Europe (as measured by the 2020 will be remembered for some time,
STOXX Europe 600 index) returned a solid packed full of events and market gyrations.
(+7.1%) whilst the MSCI AC Asia Ex Japan
also recorded a strong return of (+10.2%); We had virus outcomes worsen over the
all of which aided by further optimism quarter as the northern hemisphere
towards a COVID-19 vaccine and cyclical entered their colder months, which resulted
recoveries. Positive currency movement in an increase in cases and hence an
relative to the USD and commodity price increase in restrictions and lockdowns. On
support also provided further assistance to the positive side, we saw the
market appreciation. announcement of successful phase 3 trials
for three different vaccines, with two
Property & Infrastructure granted emergency use authorisation
before the end of the year.
The Australian listed property sector
(S&P/ASX 200 A-REIT) also benefitted We also had the US election result, or lack
from the rotational trade into cyclical thereof for some time, as ballots continued
sectors during the quarter returning to be counted well after election day.
(+13.3%) however the sector remains President Trump, his legal team, and
structurally challenged (divergence in others launched numerous challenges
performance across sub-sectors) due to regarding the outcomes in certain cities
the pandemic, slowing / re-opening and state, but to no avail, with Joe Biden
economy. This is evident in the calendar and Kamala Harris all but confirmed as the
year return with the sector falling (-4.6%). new 46th President and Vice President of
Global listed property (+10.2) and global the USA. The election result also saw the
listed infrastructure (+5.9%) provided solid Democrats retain the House but with a
returns for the quarter on a currency smaller majority, whilst the Senate
hedged basis, however the continuing remained undecided as the state of
appreciation of the Aussie dollar hurt Georgia had a run-off to confirm their two
unhedged returns (5.8%) and (0.9%) seats. Leading into the election, most had
respectively. a mixed or messy election result being
negative for markets, but investors seemed
Bonds and Cash to find positives in the result.
The RBA and central banks globally The UK and the European Union (EU)
remained accommodative in support of finally struck a trade deal with no time to
bond markets via stimulus programs. spare before their self-appointed deadline,
Yields on 10-year treasures, both
