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Putting local and international financial markets into context

Gain insights into Australian and international financial markets, asset classes, and market volatility. Understand market trends and performance over different time frames.

francescampbell
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Putting local and international financial markets into context

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  1. Putting local and international financial markets into context Updated to 30 February 2009

  2. 1. Australian share markets – the 1, 10 and 50 year view 2. How have international markets fared? 3. A quick look at the different asset classes 4. Getting some perspective on market volatility

  3. The Australian share market has fallen38% in the past 12 months S&P/ASX 300 Accumulation Index – 12 months to 28 February 2009 Series Rebased: 28 February 2008 = 100 Feb-08 Jun-08 Oct-08 Dec-08 Feb-09 Aug-08 Apr-08 Source: BT Financial Group, Premium Data 3

  4. But over the past 10 years, it’s still up 81% S&P/ASX 300 Accumulation Index – 10 years to 28 February 2009 Series Rebased: 28 February 1999 = 100 Feb-99 Feb-03 Feb-07 Feb-09 Feb-05 Feb-01 Source: BT Financial Group, Premium Data 4

  5. 2008 was a ‘1 in 50’ year event forAustralian share market returns All Ords /ASX 300 Accumulation Index – 50 years to 2008 Source: Standard & Poor’s

  6. But every period of negative returns isgenerally followed by increased gains All Ords /ASX 300 Accumulation Index – 50 years to 2008 Source: Standard & Poor’s

  7. 1. Australian share markets – the 1, 10 and 50 year view 2. How have international markets fared? 3. A quick look at the different asset classes 4. Getting some perspective on market volatility

  8. The major international markets alsoplunged in the past 12 months Series Rebased: 28 February 2008 = 100 Feb-08 Jun-08 Oct-08 Dec-08 Feb-09 Aug-08 Apr-08 FTSE 100 (UK) -35.8%, Nikkei 225 (Japan) -45.7%, S&P500 (US) -46.3%, DJ Euro Stoxx 50 (Europe) -47.8% Source: BT Financial Group, Premium Data 8

  9. And it’s no wonder why – the US had itsworst year in more than 50 years The US All Ords /ASX 300 Accumulation Index – 50 years to 2008 Source: Value Square Asset Management, Yale University

  10. 1. Australian financial markets – a 12 month view 2. How have international markets fared? 3. A quick look at the different asset classes 4. Getting some perspective on market volatility

  11. Growth assets have been the most affected bythe rise in market volatility in the past year 12 months to 28 Feb 2009 12 months to 28 Feb 2008 Cash International listed property – hedged Australian listed property International bonds - hedged Australian bonds International shares - hedged International shares Australian shares Source: BT Financial Group

  12. While cash saw stronger returns this past year, Shares still outperform over the long-term 28 February 2009 Australian shares Listed property Australian bonds Global shares Cash Note: Accumulated returns based on $1,000 invested in December 1984 Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, UBS Bank Bill 0+ years 12

  13. 1. Australian share markets – the 1, 10 and 50 year view 2. How have international markets fared? 3. A quick look at the different asset classes 4. Getting some perspective on market volatility

  14. Annual returns of Australian shares (%) – All Ords / ASX S&P Accumulation Index (since 1956) 70 60 50 40 30 20 10 0 -10 -20 -30 1974 1977 1980 1983 1986 1989 1992 2004 2007 1956 1959 1962 1965 1968 1971 1995 1998 2001 Volatility can hurt returns in the short term… Source: Standard & Poor’s 14

  15. Rolling 5 year returns of Australian shares (% annualised) – All Ords / ASX S&P Accumulation Index (since 1960) 35 30 25 20 15 10 5 0 -5 -10 1975 1978 1981 1984 1987 1990 1993 2005 1960 1963 1966 1969 1972 1996 1999 2002 …but it’s a different picture over the longer term Source: Standard & Poor’s 15

  16. Rolling 10 year returns of Australian shares (% annualised) – All Ords / S&P Accumulation Index (since 1965) 30 25 20 15 10 5 0 -5 -10 1980 1983 1986 1989 1992 1995 2004 2007 1965 1968 1971 1974 1977 1998 2001 And the longer the better! Source: Standard & Poor’s 16

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