July: Start of the New FY
- Major asset classes all delivered gains for the month of July, led by Global small companies and Listed Infrastructure.
- Global Shares on an unhedged basis gained 1.2%. Global shares on a hedged basis gained 4.1%. Value was the best performing investment style for the month, returning ~5.0%, its best relative performance since April 2022. Momentum as an investment style recorded the weakest return 1.1% over the month.
- Australian Shares also performed well, relative to other asset classes. The S&P/ASX 200 Accumulation Index performed strongly, up 4.2% over the month. This was driven by strong growth from the banks, rising 7.1% after strong returns the previous month.
- Global small caps rebounded, returning a stellar 9.3% for the month. Investors shifted away from many of the mega-cap technology stocks that had led the market over the previous 18 months and rotated into small caps.
- Fixed income had another strong month with Australian Fixed Interest returning +1.5% and International Fixed Interest returning +1.9% for the month.
- The Australian dollar AUD was down against all currencies over the month with the AUD down 1.9% against the greenback. Over the previous 12 months the AUD remains behind the USD and Euro by 2.6% and -1.1% respectively, however is up 2.7% against the Yen.
U.S.
- The U.S. Job Market is cooling. The unemployment rate in the United States rose for the fourth month in succession to 4.3% in July, up 0.2% from June.
- Nonfarm payroll employment increased by 114,000 in July while the total number of unemployed people increasing by 352,000 to 7.2 million.
- In the U.S., the number of job openings changed little at 8.2 million on the last business day of June. Labor force participation has ticked up slightly at 62.7% in July, up from 62.6% in June.
Locally
- The Consumer Price Index (CPI) indicator in Australia rose to 3.8% in the year to June 2024, slightly down from a 4.0% rise in the 12 months to May. The most significant increases coming Alcohol and Tobacco (+6.9%), Housing (+5.5%), Transport (+4.2%) and Food and Non-Alcoholic Beverages (+3.3%).
- The Australian Job Market remains tight. Australia’s seasonally adjusted unemployment rate rose to 4.1% in June 2024, an increase of 0.5% from 12 months ago and a slight increase of 0.1% from May 2024 figure.
Major Asset Class Performance (%)
Source: Bloomberg, Rhombus Advisory, 31 July 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; Listed Infrastructure (hedged): FTSE Global Core Infrastructure 50/50 NR Index (AUD Hedged) 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: Bloomberg, Rhombus Advisory, 31 July 2024
All foreign exchange rates are rounded to two decimal places where appropriate.
Please note: Past performance is not indicative of future performance.
