These performance numbers are calculated by Hobson Wealth based on a blend of the performance of the underlying Hobson Wealth Investment Funds as applicable to each of the model portfolio allocations, the performance is gross of fees and tax. The performance information for each of the underlying Hobson Wealth Investment Funds can be obtained from the Quarterly Fund Updates for the Funds, which are available on www.iisolutions.co.nz and www.business.govt.nz/disclose Since inception performance is a cumulative measure from inception of the Funds, October 24th 2019.
The New Zealand share market struggled in May, closing down -3.2% as expectations of inflation weighed on the market. May is also a key reporting month for New Zealand and we saw many companies report half and full year profit results. The earnings season overall was positive, however a softer-than-expected result from market heavyweight, Fisher & Paykel Healthcare, also contributed to the weakness this month.
The Australian share market recorded its eighth consecutive monthly increase, finishing May just short of the pre-Covid high. Bank stocks led the gains, with several earnings upgrades across the finance sector as the economic outlook for Australia continues to improve.
US share markets finished the month flat in US dollar terms. The S&P 500 and Dow Jones made new all-time highs in the first week of the month, before worries of inflation and higher than expected unemployment data softened the market in the subsequent three weeks. European shares were a standout in May as vaccination rates and activity levels improved, particularly in the services sector.
Emerging market shares generated a positive return amid ongoing signs of a global economic recovery and the transition out of the pandemic. India was a top performing region as the Covid-19 flareup looks to have peaked, while rising infections in Singapore and Thailand held back these markets.
Global share markets continue to grind higher, despite the looming threat of inflation and the prospect of central banks reducing their support. A big reason for this, is improving company earnings. The world has now administered nearly 1.75 billion vaccine doses, economies are opening up, and expectations for the second half of the year continue to improve. We expect volatility to persist over the coming months but ultimately remain constructive on the outlook.