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Investment markets had mixed fortunes in the first quarter, as the Trump administration’s Tariff announcements increased volatility and raised concerns about earnings and global growth.
Australian Equities
Despite the RBA cutting rates for the first time in over 4 years, Australian equities endured a weak start to the year in what is a seasonally strong period. The weakness was attributed to a poor earnings season as well as the concerns around a global trade war with uncertainty from US Tariffs.
Australian equities fell -2.80%, with the only sectors in positive territory being Industrials (+1.48%) and Utilities (+0.29%), while Communication Services (-0.20%), Materials (-0.93%), and Consumer Staples (-0.93%) outperformed the index. The worst performing sectors included Info Tech (-17.55%), Healthcare (-9.71%), Energy (-7.92%), REITs (-7.34%), ConsumerDiscretionary (-3.64%) and Financials (-3.37%).
The best-performing company for the month was West African Resources (WAF), up 61.67% on the both the strength seen in gold and strong earnings. The worst-performing stock for February was Nuix (NXL), down 51.42% after its poor earnings update.
International Equities
The MSCI World ex-Aus Total Return Index (AUD) had a negative quarter as the reversal of the US exceptionalism trade saw European equities outperform their US peers, however the weakness in US equities was enough to pull the broad index down, falling -2.41%. The best performers included Energy (+8.40%), Utilities (+5.67%), and Financials (+4.91%). The worst performers included Tech (-12.81%), Consumer Discretionary (-11.37%), and Communication Services (-5.49%).
The opening quarter saw US Equities substantially weaker than the MSCI World ex-Aus Total Return Index (AUD) due to the concerns around US tariffs. In AUD terms the S&P 500 fell -5.44%, the Nasdaq was weaker falling -11.22%, while the Russell 2000 was also weak, down -10.60%. European equities benefited from the rotation out of US equities as US exceptionalism waned. The FTSE and Euro Stoxx gained strongly, rising +7.3%, and +11.17% respectively.
Real Assets
Infrastructurewas a standout performer while Property also hadpositive returns, Global Listed Infrastructure up +5.05% andGlobal Listed Property rising +0.66%.
Fixed Income
FixedIncome also saw positive returns over the quarter as yieldsfell during the quarter. International Fixed Income rose +1.14%, whileAustralian Fixed Income had a similar
performance,rising +1.29%.
Currency Markets
TheUS dollar index (DXY) was weaker as growth concerns aroundUS tariffs increased over the quarter. This saw the DXYfall, -3.94%. The AUD was stronger despite the RBA cuttingrates and concerns around how China’s tariffs would affect Australia, rising+0.95%, finishing at 62.47c, up from 61.88c.
Commodities
Commoditieswere positive in the first quarter. Brent crude pricerose slightly +0.13%, to finish the quarter at US$74.74/barrel,while Iron Ore was similar +0.06% to
US$95.41/t.
Theeconomic uncertainty over the period contributed to a hugerise in gold prices, rising +19.02%, to finish well above the3,000 mark at US$3,122.70.
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