In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi asset investors. During the month of January, Risk-on trade continued despite spikes in fear gauges. The worst performing asset classes were Global and Australian REITs, Global and Emerging Infrastructure as well as Gold. The Australian dollar index closed slightly lower (-0.6%) over the month after rallying strongly over the past 6 to 9 months against major pairs. The continued monetary and fiscal support around the world and broadening of the vaccine rollout program is likely to provide ongoing support for cyclical recovery in economies, business cycle and earning.
Periodic Asset Returns as of 31/01/2021
Asset Growth over Past Decade
Periodic returns for AUD as of 31/01/2021
- FX movements over the past 1 and 5 years have mostly caused negative currency effects on unhedged defensive and growth assets.
- Over the past year, negative currency effect has been visible across all asset classes – most notably in Fixed In- come.
- Investors holding assets for medium-term (3 years) all realized positive currency effect.
- In general, investors holding assets for short (1 year) and long (5 year) term periods have seen negative currency effects. Whilst investors holding for medium length have witnessed positive currency effects due to FX movements.
Calendar year returns for AUD against other currencies
Correlation between Sectors in the past three years
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