SUMMARY
The Fund returned -2.3% in May. By way of comparison, the Australian stock market declined by -2.6%, whilst the (annual) return of the RBA cash rate plus 6% equated to approximately +0.9% for the month. Calendar year to date the Fund has now generated a return of +5.3%, which compares favourably to our benchmark return of +3.8%, and almost double the overall market return of +2.7% 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.
Following an April pause, the RBA resumed its hiking trajectory, raising the cash rate by 25bps to 3.85% in May. The majority of the market decline during May occurred following the April CPI print which at +6.8% was ahead of both consensus expectations and the previous quarters print (+6.3%). This is consistent with our expectations, namely that once high levels of inflation enter the system, they can be difficult to eliminate, particularly when it begins to show up in labour costs and residential accommodation costs.
We recently recorded a Portfolio and Investment Update webinar, which is available below for your review. CPD points are applicable for Australian Financial Planners HERE.