Quarterly Update June
09 July 2010Quarterly Update June 2010
In the second quarter of 2010, equity markets delivered a negative performance after four consecutive positive quarterly returns. In Australia, the Resource Super Profit Tax discussions dominated the market and headlines, and defensives stocks outperformed. The market was also dominated by the key macro themes of sovereign risk and slowing economic growth. Gold, USD and US treasuries were winners.
Australia's performance vs the world
In local currency, the S&P/ASX 200 fell -11.8% (-20.1% in USD) for the quarter performing inline with the S&P 500 (-11.9%) and outperforming the World MSCI ex Australia Index (-13%). The S&P Asia 50 returned -6.80% outperforming the Australian market.
Global equity markets continue to rally
Equity investors had it tough during the 2nd quarter of 2010, with high volatility and the markets finishing in the red. After four consecutive quarters of positive returns, the MSCI World index recorded a quarterly loss of -13%. The World Markets were also dominated by the key macro themes of sovereign risk and slowing economic growth.
Economic Performance
The AUD finished the quarter at USD 84.08c, down -8.3% over the quarter. The 10-year bond rate finished at 5.09%, down from 5.78% at the start of the quarter. The risk aversion trade saw sovereign bonds rally in all developed markets.
The key news in currency markets was China flexing the renminbi peg by moving into a trading band based on a basket of currencies. The USD was volatile during quarter. Initially, it appreciated against most major currencies, with investors looking for the relative safety of the USD. But, with more news flowing about the weak US economic recovery, the USD weakened towards the end of the quarter.
Commodity Overview
Most commodity markets delivered negative returns during the quarter. Gold was a clear winner, with risk-averse punters coming into play, breaking the US$1,250 level twice during the quarter. The CRB index fell -5.4% over the quarter. Oil prices fell too US$75.6 and recorded a -9.7% fall for the quarter.
Important Information
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Any statements contained here are general only and do not take into account your needs, objectives, financial circumstances, or investment preferences and are not intended to constitute advice.
No responsibility or liability is accepted by Instreet or any third party who has contributed to this presentation for any of the information contained herein or for any action taken by you or any of your officers, employees, agents or associates.
Instreet Investment Limited, and the Issuer are not bound by the data set out in this document and are not liable to cover any difference between the indicative values and the value on redemption. This data is not a quote or a redemption price – amounts payable on redemption may be subject to costs as set out in the relevant PDS.
Past performance: Past performance is not a reliable indicator of future performance.
