The last three months will be hard to beat for the sheer turbulence, volatility and huge swings in asset prices which swept through markets. The good news is that despite one of the worst Januarys in recent memory, markets turned positive midway through February continued through much of March and as you’ll see this reflected in your portfolio returns.
The FTSE/JSE ALSI index gained 3.9% in the first quarter of 2016, in a “risk on” environment, driven by global sentiment on the back of the Fed not raising rates as well as ECB rate cuts and further QE expansion.
A notable standout during the first quarter was the big surge for Oil which saw WTI Crude Oil rally nearly +14% in March alone. This coupled with increased China stimulus helped boost commodity prices and the share prices of resource companies. Industrial Metals (+93.1%), Gold (+92.8%), Platinum (+74.6%) and General Mining shares (+12.5%) surge over the first quarter of 2016.
Despite these strong equity returns, listed property is the best performing domestic asset class year to date posting a return of 10.1% with the majority of that coming in March as the sector benefitted from the increased risk appetite.
Global developed markets (MSCI World Index) also rose over the month recouping some of January’s losses and ended the quarter down a mere 0.19% in US dollars. Emerging markets benefitted from the “risk on” trade and experienced solid double digit gain in March bringing the US dollar return for the MSCI Emerging Markets Index to 5.8% the quarter.
Despite political risks in South Africa, the Rand strengthened 4.75% against the US dollar putting a dampening on the US dollar returns of the global equities.