Key global market highlights of the past financial year!
- Strong global equity performance, with world stocks returning 37.4% (on a local currency basis and including dividends). Australian equities did Ok also, though lagged global performance with a total return (including dividends) of 27.8%
- The strongest global sector in the past year was technology, with a 45.5% return.. though financials also did well with a 45.3% return reflecting the lift In bond yields and rotation to beaten-up value sectors. Among factors, global small caps returned 50.3%! Value marginally outperformed growth over the year, with the global MSCI growth index returning 41.5% and MSCI global value index returning 37.8%
- With Australian sectors, the best sector in the past financial year was consumer discretionary with a 46.1% return! That’s little wonder considering the strong stimulus fuelled rebound in consumer spending during the COVID crisis. Financials were second with a 40.6% return, as the banking sectors bad debt situation was not as bad a first feared. Small caps outperformed large caps, as was the case globally, with the S&P Small Ordinaries index returning 33.2%. In Australia, value also outperformed growth.
Among other major markets, the lift in bond yields is notable, with Australian 10-year bond yields up 66 basis points to 1.53% (from 0.87%).
That said, the rise in short-term bond yields was more modest, such that overall Australia bonds as an asset class (as measures by the Bloomberg Composite Bond Index) produced a negative return of “only” 0.8%.
The $A rose 8.6% while oil and iron-ore prices surged, whereas gold did not.