Pinnacle Investment Forum 2019 image A closer look: Ping An Insurance

Market Commentary

Market Commentary – March 2019

Global equity markets extended 2019’s gains in March (+1.4% in AUD, +1.3% USD), albeit at a slower pace than January and February. Stocks rallied on growing optimism that a trade agreement between the US and China may be imminent as well as further central bank accommodation. Real Estate, Information Technology and Consumer Staples outperformed with investors showing a stylistic preference for “momentum” and “growth” over “value”. Financials lagged given lower bond yields and a flattening of the yield curve, followed by Industrials. High beta, cyclicals and expensive growth stocks continued to perform well year to date in what has been a broad beta rally.

Focus during the month was on the large repricing across bond markets following the dovish Fed meeting and the ECB downgrades to forecasts. The moves were further exacerbated by soft economic data, in particular the PMI’s. US 10yr yields (-28bps) fell sharply, yield curves flattened and the US 3mth-10yr spread inverted for the first time since August 2006, which was closely watched as a good predictor of recessions in the past. This saw markets closing off the months’ highs.

China broadly outperformed on signs that recent policy easing measures having an impact of growth stabilisation, exemplified by the PMI data. US equities ground out marginal gains amid optimistic signs on the economy and trade discussions. Europe underperformed on growth concerns post a series of weak economic data points and the Brexit overhang with no signs of a resolution. The rally in oil continued and gold traded lower.

Against this backdrop the Antipodes Global Fund fell in March, whilst the Antipodes Global Fund – Long and Antipodes Asia Fund delivered a return despite underperforming their benchmarks. Contributors to performance included our Consumer Incumbent, Software Incumbent and Healthcare clusters, while our Domestic and Global Cyclical exposures were the key detractors as well as our shorts..

For further information, please refer to our Monthly Fund updates.