Market Insights
Fund Update
The Fund returned 0.74% over the month of January, delivered 2.03% for the previous three months and 8.97% over the past 12 months. The Net Asset Value (NAV) of the Fund, as at 31 January 2015, was $54.27m 2 and the redemption price was 1.3553363. The Fund has little... Read more...RBA lowers Cash Rate to 2.25%.
After nearly 18 months of sitting on the sidelines, the RBA has acted by cutting the overnight rate 25bps, to 2.25%.
Our economist, Stephen Roberts, predicted the move and was one of only 6 out of the 26 economists surveyed by Bloomberg to get the call right. The bond market had priced in a greater than 50% chance of a cut and is now pricing a 45% chance of a follow-up cut next month and fully pricing it by June.
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Read more...Market Drivers
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Risk Assets were mostly stronger in January, but a noticeable exception was the US equity market beset by the negative impact of much lower oil prices on US energy companies, as well as a run of softer-than-expected Q4 company earnings reports starting to reflect the damaging impact of the appreciating US dollar. Outside the US currency, weakness in many countries and a batch (of monetary policy easing announcements from several central banks of which the most notable was the substantial asset purchase announcement (QE) by the European Central Bank) all served to underpin share buying. Over the month, the US S&P 500 fell by 3.6% going against the grain of strong increases elsewhere ranging from a 1.3% rise for Japan’s Nikkei to a 9.1% rise for the German DAX. The ASX 200 rose by 3.3%, but like all equity markets, progress was bumpy through the month and volatility was high.
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