Domestically, the S&P/ASX 200 Accumulation Index was up 1.45% during the period. Materials (+7.2%) was the best performing sector. The economic recovery, supported by large fiscal and monetary stimulus has led to a much stronger outlook for inflation and bond yields, which is historically beneficial to the sector. Financials (+4.5%) similarly outperformed, as the rising yields gave further life to the value rotation that started last year.

Information Technology (9.1%) was the worst performer, as growth stocks were heavily impacted by a steepening in the yield curve. Utilities (8.8%) also underperformed as the assets with fixed interest-like qualities followed bonds lower.

International equities finished the month higher in all but one of the major markets. The Japanese Nikkei 225 (+4.7%) led international markets as a spike in global bond yields and fears of inflation forced a strong value rotation. Highlighting this shift, the S&P 500 (+2.6%) outperformed its more growth-focussed peer the NASDAQ (+0.9%) and the high-flying Chinese CSI 300 (-0.3%). European markets also performed well (MSCI Europe ex-UK +2.5%), followed by the East Asian bourses (Hang Seng +2.5%, KOSPI +1.3%). The UK (FTSE 100 +1.2%) lagged, despite its valuation support as markets remain cautious on the vaccine rollout and Brexit implications.

Disclaimer
TThis document has been prepared by DNR Capital Pty Ltd, AFS Representative – 294844 of DNR AFSL Pty Ltd ABN 39 118 946 400, AFSL 301658. It is general information only and is not intended to be a recommendation to invest in any product or financial service mentioned above. Whilst DNR Capital has used its best endeavours to ensure the information within this document is accurate it cannot be relied upon in any way and recipients must make their own enquiries concerning the accuracy of the information within. The general information in this document has been prepared without reference to any recipient’s objectives, financial situation or needs. Before making any financial investment decisions, we recommend recipients obtain legal and taxation advice appropriate to their particular needs. Investment in a DNR Capital managed account can only be made on completion of all the required documentation.

Source: Motor Trader e-Magazine (March 2021)

10 March 2021