March: Small Caps Outperform
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March was one of those rare month’s where all of the asset classes in this report produced positive returns. Interestingly, the returns for the 1 year to 31 March 2024 were also very good and all positive.
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Global Shares on an unhedged basis gained 3.0%. Global shares on a hedged basis gained 3.3%. Value-Weighted and Value were the best performing styles for the month, with Momentum as a style also performing well.
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Australian shares also performed well, with the broad market index, the S&P/ASX 200 Accumulation Index gaining 3.3% for the month. The best performing styles for the month were Small Caps and Momentum. The poorest performing style was Quality, which still performed to a reasonable standard.
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Australian small caps were the best performing asset class for the month returning an excellent 4.8% for March. Fixed income gained some ground this month with
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Australian Fixed Interest gaining 1.1%, while global fixed interest returned 0.8%.
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The Australian dollar gained 0.2% against the U.S. dollar over the month.
Job Market Remains Strong
Globally
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The unemployment rate in the United States dipped to 3.8% in March 2024 from the previous month’s two-year high of 3.9% and surprising market expectations, which had forecasted the rate to remain unchanged. The number of unemployed individuals decreased by 29,000 to 6.4 million, while employment levels saw a significant surge, rising by 498,000 to reach 161.5 million.
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In the U.S., the number of job openings went up by 8,000 from the previous month to 8.756 million in February 2024, marginally above market expectations of 8.75 million.
Locally
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The monthly Consumer Price Index (CPI) indicator in Australia stood at 3.4% in the year to February 2024, unchanged from the previous two months and below market expectations of 3.5%. Still, the latest reading pointed to the lowest since November 2021, with food prices rising the least in 25 months (3.6% vs 4.4% in January).
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Australia’s seasonally adjusted unemployment rate fell to 3.7% in February 2024, the lowest since last September, from 4.1% in January. Figures were less than market forecasts of 4.0%, as the number of unemployed individuals dropped by 52,000 to 548,300, with those seeking full-time jobs falling by 47,800 to 351,500.
Major asset class performance
Source: FactSet, Lonsec & Insignia Financial, 31 March 2024
Indices used: Australian Shares: S&P/ASX 200 Accumulation Index, Australian small companies: S&P/ASX Small Ordinaries Accumulation Index, Global shares (hedged): MSCI World ex Australia Net Total Return (in AUD), Global shares (unhedged): MSCI World ex Australia Hedged AUD Net Total Return Index; Global small companies (unhedged): MSCI World Small Cap Net Total Return USD Index (in AUD); Global emerging markets (unhedged): MSCI Emerging Markets EM Net Total Return AUD Index; Global listed property (hedged): FTSE EPRA/NAREIT Developed Index Hedged in AUD Net Total Return; Cash: Bloomberg AusBond Bank Bill Index; Australian fixed income: Bloomberg AusBond Composite 0+ Yr Index; International fixed income: Bloomberg Barclays Global Aggregate Total Return Index Value Hedged AUD
Please note: Past performance is not indicative of future performance.
Currency markets
Source: FactSet & Insignia Financial, 31 March 2024. All foreign exchange rates are rounded to two decimal places where
Please note: Past performance is not indicative of future performance.
