Page 4 - PSK Financial Services

Quarter 2

in Review

Below is a summary and highlights from
the movements this quarter and major
changes to some of the key asset areas:
Australian equities

Although still well short of February highs,
the Australian equity market continues to
fight back, finishing the June quarter up
down 16.5%. Performance was spread
across all sectors but those impacted
more severely (cyclicals) in the March
quarter (consumer discretionary +30%,
energy +28%) led the charge. Information
technology was the biggest mover +49%
with strong momentum exacerbated by
lockdown measures. Cyclical sectors still Property & Infrastructure
lag the defensive sectors quite The Australian listed property sector
considerably year-to-date. (+19.9%) came back strongly in the June
The more volatile small cap sector quarter. Global listed property (+8.7%)
(+23.9%) outperformed broader large and global listed infrastructure (+8.3%)
companies during the quarter and are now performed strongly on a currency hedged
outperforming the sector year-to-date. basis, but the strong rise in the Aussie
dollar saw unhedged returns fall into
negative territory. Both sectors are well
International equities down year-to-date and remain challenging
sectors going forward if lockdowns persist.
All major developed and emerging
markets finished the quarter strongly in
local currency terms (double digits), but Bonds and Cash
the sharp rise in the Aussie dollar brought
those returns back to more reasonable At a headline level, bond returns were
levels. In the US, markets shrugged off moderate in the June quarter. Australian
sharp increases in reported COVID-19 bonds were up slightly (+0.53%) whilst
cases and civil unrest; the S&P 500 global bonds (+2.3%) benefited from
returning (+7%). Emerging Markets (+5%) currency hedging in light of the rising
performed strongly as virus fears Aussie dollar. Corporate bonds
subsided, whilst Europe (+3.3%) and Asia- outperformed government bonds as
Pacific (+3.8%) also performed well. spreads continue to tighten on solvency
Sector performance mirrored the domestic risks abating, assisted by central bank
markets as information technology led the buying. Cash yields remained anchored
way, particularly in the US. low with the RBA leaving the official rate
(+0.25%) untouched throughout the
quarter.