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20170616 – Portfolio Activity

In Australia, economic data release yesterday were better than the market expected. The economy added 42,000 new jobs in May which was well ahead of the median 10,000 expected. In addition, April’s 37,400 increase was revised up to 46,100. Over the last three months employment has increased by a very strong 141,000 jobs, which has meant a doubling in the pace of yearly employment growth to 2.0% over that same period. For the third month running, all the growth was in full-time jobs at the expense of part-time, which resulted in the unemployment rate falling from 5.7% to 5.5%, the lowest rate since February 2013. This was despite a small increase in the participation rate from 64.8% to 64.9%.

The Bank of England voted by five to three, the largest division in 6 years, to keep the Bank Reference Rate at a record low of 0.25% yesterday. Policymakers showed concerns over rising inflation and slow pay growth and the effects on household spending and GDP.

US data showed manufacturing levels were steady, industrial production flat and unemployment benefit claims lower than expected. On Thursday the Federal Reserve (Fed) announced its second rate hike of 2017, an increase of 0.25% to a 1.00-1.25% range. The Fed stated inflation will be low for now but expects it to stabilise at higher levels over the medium term.

China’s economy grew faster than expected; 6.9% in the first quarter, above the government’s annual target of around 6.5%. On the back of the announcement the International Monetary Fund has raised its forecast for China’s economic growth this year to 6.7%, citing ”policy support, especially expansionary credit and public investment”. Industrial output grew at a steady 6.5% pace in May from a year earlier as government infrastructure investment continues to boost demand for building materials. Weaker growth in fixed asset investment, 8.6% for January through May, was led by a slowdown in the property sector. Retail spending was more upbeat, rising 10.7% from a year earlier, unchanged from April.

ADVISER GUIDANCE

The portfolio management team engages regularly with your Adviser to ensure we reflect your personal circumstances and preferences. Whilst this is obviously important as we establish new portfolios through the initial implementation phase, it continues in ongoing communications about stock transfers, income requirements, or lump sum deposits and withdrawals. This interaction and collaboration between you and your Adviser, and then your Adviser and the portfolio management team is an important element of the control and flexibility you have in an Individually Managed Account.

PORTFOLIO ACTIVITY

  • For most newer accounts we have purchased all international investments; MSCI Asia ex Japan ETF (3010), Emerging Markets ETF (IEM), the Japanese Topix ETF (1475) and the Developed Europe ex UK ETF (VERX).
  • Besides the international investments, we continue to focus on trades for those accounts that have specific instructions as provided to us by your adviser.

 

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