Portfolio update | April 2016
The Australian share market continued its rebound in April from its mid-February lows, with the S&P/ASX 300 Accumulation Index adding 3.34% for the month. Both the Materials and Energy sectors posted healthy gains, while Utilities and Consumer Discretionary were the only two sectors to record a negative return for the month.
Despite the sharp recovery, Ralton is still of the view many of the macro-economic headwinds which caused the volatility in markets earlier in the year remain in place today – both domestically and internationally. The key determinants of the market direction from Ralton's perspective in the coming months include:
- whether the AUD weakens again
- the direction of global liquidity: is more European/Japanese QE going to lead to more investors seeking domestic yielding stocks?
- whether the commodities rally is sustainable - a function of US-dollar direction and the stimulus in China
- the outlook the banks provide during their results announcements, and
- the high PE segment of the market looking relatively expensive and whether this de-rates.
On a more positive note for the domestic market, the RBA's move to trim its key rate to 1.75% during April, with more cuts likely, does provide additional support as domestic investors continue to hunt for yield.
View the April 2016 performance reports: