In early August global share prices fell due to uncertainty about the US presidential election, rising bond returns and concern over the September quarter earnings of the Magnificent Seven global technology giants. However, markets reversed and shares reached record highs in September after the US Federal Reserve started to ease monetary policy with a larger than usual 0.50% rate reduction.
Global shares rose again following a second Federal Reserve rate cut and the US election results in early November. The markets were buoyed by, the then President-elect, Donald Trump’s policy initiatives which included lower taxes and relaxed business regulations.
Global share markets then fell toward the back end of December. This was due to a sharp increase in 10 year US Treasury Bond yields, and the post-election rally losing momentum amid concern that Trump policies would cause inflation to rise. Despite implementing a third consecutive rate cut, the Federal Reserve amplified these concerns and indicated they would slow the pace of rate cuts, which led to a subdued finish for the first half.
Over the six month period global shares rose 6.3%, while emerging markets shares were flat (in USD)*. The Australian dollar fell sharply over the December quarter which helped soften the share market falls in Australian dollar terms.
Australian shares rose 6.9% over the six months#. Similar to global shares, Australian shares fell in early August before rising to new record highs in October and again in late November. Lower than expected inflation raised hopes for rate cuts during the second half of 2024 and bolstered the performance of interest rate sensitive sectors including banking and real estate. Despite the steady decline in inflation, the Reserve Bank of Australia continued to hold rates steady for the remainder of 2024, because underlying inflation was still stubbornly high. This coupled with global shares falling contributed to Australian shares falling in December.
Reflecting these strong share markets, BUSSQ’s growth oriented investment options had a strong six month period, with the Balanced Growth Super option returning a healthy 5.23% and the Balanced Growth Income account option delivering 6.62% for the same period^.
To see our latest investment returns for all investment options, visit our monthly investment performance page.
