This commentary has been prepared from a general investor perspective and may not directly relate to AvSuper’s specific assets, although it provides an overview of how the sectors in which AvSuper investments are performing generally. You can bookmark this page or subscribe below to be notified when we add a new investment update.
In March 2024 global markets recorded moderate growth with most major stock and bond markets producing positive returns. The rally in risk assets continued, fuelled by resilient economic data and expectation for most central banks moving toward an easing cycle.
Global equities performed strongly in March with the US S&P 500 hitting record highs during the month. Japanese equities continued its rally but with a slower growing speed, reflecting the concerns of overvaluations and changes in monetary policy.
US and European stock markets both produced positive returns. The US economy’s resilience has continued, but the US tech sector lagged, potentially due to valuation concerns. European and UK stock markets were at the forefront of growth in developed markets, driven by improved economic data and expectation around interest rate cuts.
Australian equities delivered positive returns in March, aligned with the global market. Resources and small-caps were among the outperformers.
Emerging markets produced positive returns despite flat results from Chinese equities following mixed economic data. China’s GDP target for 2024 was set at 5% in an annual meeting in March. The announcements indicated that government policy would continue supporting economic growth but reaching the target is likely to require fiscal stimulus beyond the measures unveiled by policymakers to date.
Global government bond yields fell as the market traded on the premise that rate cuts are approaching. Both the Federal Reserve and the RBA left interest rates unchanged in their March meeting, but there were indications that rates could be cut this year if inflation trended down towards targets. The Bank of England (BoE) also said the economy was heading in the right direction for rate cuts.
Global inflation has continued moderating across developed markets, while core inflation that excluded food and energy remained sticky.
In Japan, the Bank of Japan (BOJ) increased interest rates for the first time in 17 years. In addition, it is ending the policy of yield curve control. The Yen depreciated following the announcement, suggesting that the market was underwhelmed by the measures from the BOJ.
Oil rallied sharply in March, driven by renewed investor concerns about supply disruptions due to conflict in the Middle East. Gold prices had a notable surge. This was reportedly primarily fuelled by aggressive gold purchases from China.
The Australian dollar rallied sharply against the US dollar at certain points in March but retreated to near its starting position at the end of the month. Still, AUD ended the month better than most major currencies, driven by dovish views from major central banks and improved Chinese data.
Australian listed property produced strong positive returns while global listed property and infrastructure were flat over the month. Housing values have been resilient in the face of higher interest rates and cost of living pressures. The focus of the infrastructure sector has been on maintaining existing projects rather than announcing new ones.
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