SUMMARY
The Fund generated a 2.7% return in April. By way of comparison, the Australian stock market grew by +1.8%, whilst the (annual) return of the RBA cash rate plus 6% equated to approximately +0.7% for the month. Calendar year to date the Fund has now generated a return of +7.8%, which compares favourably to our benchmark return of +3%, and the overall market return of +5.4% over the same period. We are encouraged that over this period of time, the Fund has shown that a portfolio of defensive, hard assets have delivered a healthy, positive real return in difficult market conditions.
A pause by the RBA early in the month set a positive tone for markets – providing some relief around growth risks, whilst also suggesting we may be nearer to a terminal peak in the rate cycle. Rate sensitive and growth sectors benefited the most with REITS and Information Technology stocks outperforming. Conversely, commodity prices across the board came under pressure in April, with Oil, Iron Ore and several agricultural prices declining materially through the month, resulting in what has become an unfamiliar circumstance where Materials stocks underperformed. Gold bucked the trend, and its positive momentum through April has continued into May, resulting in a strong positive contribution from our position in Evolution Mining.