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The second quarter of 2024 delivered mixed returns across asset classes with International Equities and Infrastructure being the best performers for the period.
The positive gains seen in International Equities were largely attributed to the outperformance of the ‘Magnificent 7’ in the US relative to the broader market as the cash rate narrative moved in varying directions across the globe.
Australian Equities fell over the course of the second quarter after trading sideways for the final two months as equities battled with expectations of rate cuts in foreign markets versus stickier than expected inflation locally.
During the quarter the best performing sectors were Utilities (+12.08%) Information Technology (+2.83%), Financials (+2.66%) and Healthcare (+1.88%). The worst performers were REITs (-7.14%), Energy (-6.89%), Materials (-5.93%), Industrials (-5.15%), and Communication Services (-4.93%).
The best performing company for the quarter was Telix Pharmaceuticals (TLX), up over 44%, as the company rose on stronger than expected earnings and positive data from a clinical trial. The worst performing was Fletcher Building (FBU), after it lowered its FY guidance materially. It finished the quarter down almost 30%.
The MSCI World ex-Aus Total Return index had a positive Q2, rising 0.28%, with Tech (+11.25%) and Communication Services (+7.79%) the significant outperformers while Utilities (+2.05%) also outperformed. The worst performers were REITs (-4.15%), Materials (-3.90%), Consumer Discretionary (-2.77%) and Industrials (-2.62%).
US equities were strong over the quarter, the S&P 500 rose 3.92%, the Nasdaq the best performer +8.26%, while the broader Russell 2000 was in the red, falling -3.62%. European equities were mixed with the Euro Stoxx ending the quarter -3.58% after the political climate shifted with French elections, while the FTSE was one of the better performing global indices rising +2.66%.
Infrastructure and Property had mixed performance over the quarter as rate cut dynamics shifted across the globe. Global listed property fell 2.06% while global listed infrastructure rose +0.52%.
Fixed income returns fell across domestic and international markets as yields pushed higher due to changing rate cut expectations. International fixed income markets were weaker -0.16%, while Australian Fixed Income was also weak, -0.84%.
The US dollar index (DXY) carried on from the first quarter, rising +1.32% in the second quarter, while the AUD/USD strengthened, rising 2.28% from just above 65c to 66.7c as the contrasting inflation dynamics became more apparent.
Commodities had unwound some of the strength they saw at the start of the year, with Brent crude price falling -1.22%, to finish at US$86.41/barrel. Iron ore rebounded after its poor first quarter rising back above US$100/t (+7.44%) to finish the second quarter at US$101.92/t. Precious Metals were positive with Gold rising +4.34% to close at US$2,326.75, while Silver had a very strong quarter, outperforming Gold and rising +16.74%.
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UA is committed to collaborating with and assisting our clients to achieve and surpass their financial goals. If you're considering your next move, be sure to contact us today!
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