June 2015 Review & Comments
Written by Tony Gray   
Wednesday, 08 July 2015 16:25

Portfolio Valuation & Comment

Set out below are returns for some of the major asset classes for the financial year:


Asset Class

Total Return (Income & Growth) 2013/14 FY

International Shares - MSCI World Accumulation Index


Australian Shares – S&P/ASX 200 Accumulation Index


Listed Property – S&P/ASX 300 A-REIT Accumulation Index


Cash Rate (since May 2015)


The actual return from international shares was stronger than the above table suggests due to weakness in the Australian dollar – although that weakness was predominantly against the $US and British Pound from September to January.  This was the period during which the very rapid and significant falls in the price of oil, iron ore, coal and base metals occurred.

The timing of returns varied – all of the return from listed property occurred July to mid-January and price falls exceeded income from mid-January to the end of June.  This is no surprise, as the Commonwealth Government 10 year bond rate has been rising since January.  What had been a tailwind of falling interest rates supporting higher property prices became a headwind.

Australian shares were on a rollercoaster– with the index low points being October and December and the market peaking through March and April before trending lower the past few months.  Almost all of the return from shares (at an index level) came from dividend income.  Mining, energy and related service sectors fell over the past year.  Banks – for all of the movement were pretty much flat.  The decline in recent months has seen excessive share price premiums come out of a range of stocks, although there have been enough profit downgrades to confirm the feeling that local companies are finding it difficult to generate earnings growth.

On the whole, while we now see some stocks offering worthwhile value, we are not seeing discounts providing a larger margin of safety.  Some selective buying (probably only initial half weights) is likely as we review and talk over portfolios.

If you are concerned that your portfolio is not positioned defensively enough, or conversely feel that you are comfortable applying some excess at-call monies to work, then please make contact.  We will be sending out some regulatory paperwork later this month – relating to fee statements and client opt-in rules and will provide further comment on markets and opportunities/threats at that time.

Best wishes,


A.W. (Tony) Gray BCom, LLB, Dip FP, GDipAppFin, CFP, FFin

Principal, TG Financial

Please treat the above comments as General Advice or general information, with no action to occur until we have considered with reference to your financial position, needs and goals.

Last Updated on Wednesday, 08 July 2015 16:36

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