Markets started positively in the second half of the financial year as the global economy found strong footing in positive synchronised growth. The main economies of Europe and the US performed well, along with most Emerging Markets. However, in early 2018, strong volatility saw markets sell off aggressively.
In the months since the sell-off, underlying economic momentum has remained sound, though a divergence between the regions has started to arise. The US, supported by tax cuts and government spending, has remained strong. However, other regions face increased uncertainty as theDonald Trump inspired trade disagreements cloud the trade outlook. This uncertainty, along with other geopolitical events, has been a headwind for equity markets.
Locally, the domestic market has held up well despite the impact of the Royal Commission into misconduct in the Banking, Superannuation and Financial Services Industries, which is the largest sector in the market.
Returns across the main asset classes in super were positive over the 12 months to 30 June 2018: