Global markets rallied in September (MSCI ACWI 2.0%), led by the Korean KOSPI (+4.8%) and the Japan Nikkei 225 (+5.1%) who have suffered in recent times from the global trade slowdown. The move saw rotation in to these low-valuation, battered markets, including the European (MSCI Europe ex-UK +3.1%) and UK (FTSE +3.0%) indices. US Markets were a little subdued compared to peers (S&P500 +1.7%, NASDAQ +0.5%) and the Hang Seng failed to capture the same value trade as peers due to the ongoing disturbances caused by the continuance and escalation of anti-government protesting in the city.

Domestically, the S&P/ASX 200 Accumulation Index was up 1.84% in September, slightly underperforming the broader global markets. Financials (+4.1%) performed the best, as bond yields pushed decidedly higher for the first time this year, sparking a flight to value. The sector has typically been a laggard due to anaemic bank growth and the effect of falling rates, leaving them with depressed valuations. Consumer Discretionary (3.0%) also outperformed as investors ease away from the worst case scenario for consumers and some retailers released surprising earnings updates. Healthcare (-2.8%) and Communication Services (-3.2%) were the worst performers as the market pursued the rotation out of expensive defensives and in to beaten-up sectors with some earnings risk; a small reversal of the overwhelming trend that has defined markets for a decade.

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