Bulls and bears play together
Signs of a bull and bear market emerged in May when both Australian shares and listed property were the top performing asset classes for the month.
Listed property trusts, traditionally considered good performers in bear markets, posted a 1.5 per cent return for the month, just 20 basis points behind Australian shares.
Traditionally defensive sectors are looking like posting the biggest gains for the 2000/01 financial year. Listed property trusts are up 9 per cent in the 11 months to May 31, while international bonds have gained 8.3 per cent. Over the same time frame, Australian equities are up a comparatively modest 5.1 per cent and international equities have lost 2.6 per cent.
Ausbil Dexia chief investment officer Michael Wilson described the performance of overseas market for the financial year as "disastrous".
"Major global markets, in local currency terms, are down between 13 and 24 per cent year-to-date," he says.
"Domestic investors, however, have been sheltered by a declining Australian dollar which offset most of the global market losses."
While Australian shares had a good run in May, overseas markets generally continued their woes of the past year. The Dow Jones index in the US was one of the few in positive territory, posting 1.6 per cent for the month, compared to the S&P 500 which fell 0.5 per cent and the Nasdaq which lost 0.3 per cent. Outside the US, the UK market was down 2.9 per cent, Japan lost 4.8 per cent and New Zealand fell 4.2 per cent.
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While the last several months have seen increased market volatility, particularly in the US, advisers said there are multiple reasons why there has been an increase in defensive asset flows.
Scarcity Partners believes the dynamics playing out in the managed account and outsourced chief investment officer market are “here to stay” based on positive developments in financial advice.
Former executive chairman of failed stockbroker BBY, Glenn Rosewall, has been charged with aiding, abetting, counselling or procuring BBY’s dishonest conduct in relation to a financial service.
Fidelity International research has revealed Australian investors are significantly more optimistic about the market outlook and feeling more comfortable than their APAC peers, despite ongoing market volatility.
