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Boyce Financial Services Pty Ltd as Trustee for
Boyce Financial Services Unit Trust (AFSL 522265).




JUNE 2021: Finance Update

21 July 2021

What a year that was!

The recovery after the initial COVID sell off in March and April 2020 has been quite remarkable. The 2021 Financial Year saw some amazing 1 year returns for growth assets in particular - as can be seen in the table below.



Aust Equities

Small Caps

International Equities

A Reits

Aust Fixed Interest

Intern. Fixed Interest


Emerging Markets


1 Year










3 Year










10 Year










Source: Morningstar

The table above demonstrates the unusual activity from the 2021 Financial Year. Returns like this are unlikely to be seen again for some time, so it is wise to stay diversified.

Australian Equities

The Australian share market finished the fiscal year with its best performance since inception, with the market gaining 27.8% over the past 12 months. For June, Australia’s S&P/ASX 200 Index rose 2.3%. The best performing sectors for the month were information technology (+13.4%), followed by communications services (+5.6%) and property (+5.3%). Financials was the only sector to finish in the red for the month (-0.2%).

The Australian economy leading indicators (which give us an idea of what might be happening in the economy) are particularly positive at the moment. Business and consumer surveys, car sales and housing construction figures are suggesting growth of 5% for the 2021 calendar year. We are also seeing encouraging labour market figures with 115,000 jobs created for May – to give an annual total of almost 1 million jobs – so the labour market is recovering quite solidly.

Unemployment is down at 5.1% – which is almost its pre-COVID level which is encouraging. However, the current lockdowns in Sydney and more recently Victoria means the virus is still a threat until the majority of our population is vaccinated. The rollout of the vaccination programme has had some problems and once these are resolved we can expect to see economic recovery continue.

Global Equities

Global equities continued to rally for their fifth consecutive quarter in June buoyed by the global vaccination rollout supporting strong corporate earnings results posted in the US and Europe and Wall Street has continued to see all time highs.

While global equity markets remain buoyed in the short term by continued vaccination efforts, inflation concerns and a tapering of the global monetary stimulus by central banks pose significant uncertainties for global equities into the medium term.

Developed markets rose 4.7% during June while performance in emerging market equities were softer, rising 3.3% in Australian dollar terms despite continuing to lead developed markets over 12 months. June performance remains dispersed across developed markets with the US S&P 500 returning 2.3% and 40.8% for the fiscal year.

More cyclical economies like Europe (1.6%) and Japan (1.2%) lagged the US as investors in these regions remain within defensive assets. The disparity in economic recovery continues within emerging markets with China posting an 8.8% YOY growth in industrial production for June whilst India and Brazil remain hamstrung by consecutive second and fourth wave Covid outbreaks.

Given the varied economic results across developed and emerging markets, June factor performance for global equities was dispersed by region. Notably, there was a broad reversal to the much-publicised rotation to value in the June month as investors increased their risk appetites, seeking out high beta stocks. Momentum, and to a lesser extent growth, had strong outperformance within emerging markets, whilst US, Europe and Japan saw similar outperformance in measures of quality. Across all regions value and yield were underperformers with the US posting the strongest underperformance in the value factor.

Fixed Interest

The Reserve Bank of Australia (RBA) remains committed to seeing inflation within its target range of 2-3% before raising the Cash Rate from its current record low level of 0.1%. However there has been some indications that they may be tapering stimulus, in line with other Central Banks around the world as the global economy beats previous projection in its recovery from COVID.

REITs (Listed Property Securities)

Australian listed property achieved strong result in June – with a 5.6% gain and finished the year with 33.9% YTD. Several acquisitions and takeovers have been driving this sector in recent months.

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