SUMMARY
The Fund generated a -1.2% return in the September quarter, following a -3.7% return in the month of September. By way of comparison, the Australian stock market declined by -0.7% in the quarter and -2.8% in the month, whilst the (annual) return of the RBA cash rate plus 6% equated to approximately +2.4% and +0.8% respectively. Calendar year to date, the Fund has achieved a return of +5.4%, which compares favourably to the Australian stock market at +4.0% and, following the challenging month of September, is now below the cash plus 6% benchmark of +7.2% for the 9 months.
After a positive July and a softer August, markets took a greater step down in September with the increasing weight of higher bond yields bearing down on equity valuations. US and Australian Bond yields increased by almost 50bps in September on elevated oil prices, a modest increase in inflation, and a subsequent reversion of expectations towards rates remaining higher for longer, following the more recent narrative focused on the timing of rate cuts.