Between 31 December 2015 and 15 January 2016 the Australian share market lost 7.6% (as measured by the ASX 200 index), while global markets fell 8.4% in local currency terms and 3.1% in Australian dollar terms (as measured by the MSCI ex Australia Index).
This period of uncertainty and loss of market confidence has been driven by two major factors:
Volatility in the Chinese stock market – A stellar performance over the 2014/15 financial year was followed by a protracted decline, culminating in two consecutive days of steep falls in early January, which shook investor confidence globally.
Falling oil prices – The Australian share market’s large allocation of energy and commodity stocks has been impacted by the sustained fall in the oil price and broader commodity price weakness. The lower oil price in the US has influenced the share price of energy related stocks, particularly companies involved in the shale oil industry. This has translated into a wider loss in confidence and concerns about the broader US economy.
You have nothing to be concerned about if you have a More4Life Portfolio…you will barely notice the decline in your retirement savings, due to the low equity exposure we have in our Real Return Portfolio.
This is evident in the graphic representation that demonstrates how our portfolio has performed against the balanced benchmark over time.
For added insight into how we manage to achieve our performance in your portfolio with low volatility, we encourage you to view the attached video.