Looking back over the past 12 months

Looking back over the past 12 months

Looking back over the past 12 months 150 150 Piers Bolger

Reflecting on what’s occurred in financial markets over the last 12 months, it’s really been a case of two halves. 

The performance of the Australian equity market is up around 11.5% through to the end of June, but approximately 19% of that uplift came through the first half of this calendar year. Equally, global markets have also had a really strong 12 months, with a significant uptick through the first half of 2019. 

The principal reason for this has been the change in stance from central banks globally. The US Federal Reserve has capped rates and we’ve also seen the RBA cut the cash rate here domestically. In our view, the RBA is likely to cut rates further through the second half of this year. 

This will continue to support equity and bond markets, which have had a fantastic return over the last 12 months – the domestic bond markets are up just shy of 10%. Interest rate sensitive sectors (like RAITs and infrastructure) have also performed exceptionally well across the board.

When we think about our asset allocation positioning, we are of the view that certain market segments can’t continue to perform at the same level heading forward. While we’re not looking to position portfolios in any particular direction at this stage, preferring a more neutral stance, we are adding to select positions where we think both the valuation and risk adjusted return warrants it. More broadly, we’re taking advantage of some macro elements that are positive for financial markets as we move into the second half of this year.

If you have any concerns or questions about your portfolio, it’s important to speak to your financial advisor. 

Piers Bolger is Chief Investment Officer at Viridian Advisory

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