The S&P/ASX 200 Accumulation Index was up 2.61% during June. The best performing sector was Information Technology (+6.0%), which was again largely the result of strong outperformance from Afterpay (APT, +33.6%). Consumer Discretionary (+5.4%) also outperformed as a series of sales updates from retailers showed significant growth upon the removal of COVID-19 restrictions. Underperforming the market were the REITs (-2.7%). The sector suffered from outflows as concerns about valuations linger. The COVID-19 period has accelerated the uptake of digital retail and ‘Work from Home’; negatives for Retail and Office REITs respectively. Industrials (-1.7%) also lagged the broader market in a somewhat anti-cyclical mood, as key stocks including Transurban (TCL, -3.0%) and CIMIC (CIM, -4.3%) moved lower.

International equities were up across the board over the period as markets continue to show faith in the reopening of the global economy. The Chinese CSI 300 (+7.7%) and the Hong Kong Hang Seng (+6.4%) performed best following periods of underperformance in May. The fear of a second wave in Beijing was proved to be short lived, though geopolitical tensions between China and the West continue to heighten. The NASDAQ (+6.0%) vastly outperformed its compatriot S&P 500 (+1.8%) as technology companies yet again led the United States higher. Europe (MSCI Europe +3.5%) and the UK (FTSE +1.5%) have announced border openings between certain, COVID-19 controlled nations in a step towards normalisation. Korea (KOSPI +4.4%) and Japan (Nikkei +1.9%) also participated in the rally, though not matching the performance of the Emerging Markets (MSCI EM +6.2%) who followed China higher.

Disclaimer

This 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 (July 2020)

14 July 2020