March: Small Caps Outperform
March was one of those rare month’s where all of the asset classes in this report produced positive returns. Interestingly, the returns for the 1 year to 31 March 2024 were also very good and all positive.
Global Shares on an unhedged basis gained 3.0%. Global shares on a hedged basis gained 3.3%. Value-Weighted and Value were the best performing styles for the month, with Momentum as a style also performing well.
Australian shares also performed well, with the broad market index, the S&P/ASX 200 Accumulation Index gaining 3.3% for the month. The best performing styles for the month were Small Caps and Momentum. The poorest performing style was Quality, which still performed to a reasonable standard.
Australian small caps were the best performing asset class for the month returning an excellent 4.8% for March. Fixed income gained some ground this month with
Australian Fixed Interest gaining 1.1%, while global fixed interest returned 0.8%.
The Australian dollar gained 0.2% against the U.S. dollar over the month.
Job Market Remains Strong
Globally
The unemployment rate in the United States dipped to 3.8% in March 2024 from the previous month's two-year high of 3.9% and surprising market expectations, which had forecasted the rate to remain unchanged. The number of unemployed individuals decreased by 29,000 to 6.4 million, while employment levels saw a significant surge, rising by 498,000 to reach 161.5 million.
In the U.S., the number of job openings went up by 8,000 from the previous month to 8.756 million in February 2024, marginally above market expectations of 8.75 million.
Locally
The monthly Consumer Price Index (CPI) indicator in Australia stood at 3.4% in the year to February 2024, unchanged from the previous two months and below market expectations of 3.5%. Still, the latest reading pointed to the lowest since November 2021, with food prices rising the least in 25 months (3.6% vs 4.4% in January).
Australia's seasonally adjusted unemployment rate fell to 3.7% in February 2024, the lowest since last September, from 4.1% in January. Figures were less than market forecasts of 4.0%, as the number of unemployed individuals dropped by 52,000 to 548,300, with those seeking full-time jobs falling by 47,800 to 351,500.
Major asset class performance
Source: FactSet, Lonsec & Insignia Financial, 31 March 2024
Indices used: Australian Shares: S&P/ASX 200 Accumulation Index, Australian small companies: S&P/ASX Small Ordinaries Accumulation Index, Global shares (hedged): MSCI World ex Australia Net Total Return (in AUD), Global shares (unhedged): MSCI World ex Australia Hedged AUD Net Total Return Index; Global small companies (unhedged): MSCI World Small Cap Net Total Return USD Index (in AUD); Global emerging markets (unhedged): MSCI Emerging Markets EM Net Total Return AUD Index; Global listed property (hedged): FTSE EPRA/NAREIT Developed Index Hedged in AUD Net Total Return; Cash: Bloomberg AusBond Bank Bill Index; Australian fixed income: Bloomberg AusBond Composite 0+ Yr Index; International fixed income: Bloomberg Barclays Global Aggregate Total Return Index Value Hedged AUD
Please note: Past performance is not indicative of future performance.
Currency markets
Source: FactSet & Insignia Financial, 31 March 2024. All foreign exchange rates are rounded to two decimal places where
Please note: Past performance is not indicative of future performance.