Market Update to 31 March 2021 - April 2021 - wealthpoint.co.nz - Wealthpoint Town & Country
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Market Update to
31 March 2021
April 2021
wealthpoint.co.nz
Wealthpoint Market Update April 2021
What happened
Global bond yields continued to rise over way to ramp up fiscal stimulus. US equity
the month, particularly in the US, driven by markets pushed higher on the news, while
higher inflation expectations resulting from markets in Asia lagged.
the reopening of economies post lockdowns.
Economic data continued to exceed Oil prices reached highs not seen since
expectations, with better-than-expected jobs 2019 earlier in the month, later reverting
data in the US. Jerome Powell, Chairman lower. A blockage of the Suez Canal led to a
of the US Federal Reserve also made short-term spike but overall the event had a
comments that did not calm investors’ muted impact on oil prices over the month.
inflation concerns. He said that the economic Data released showed momentum in New
reopening could cause inflation to pick up Zealand property prices with the average
temporarily and did not mention any plans price of an Auckland house increasing
for an immediate monetary response to over $100k in the month of February alone.
push back higher yields. This led to a spike in However, the government revealed new tax
bond yields, with the US 10-year rising above measures on investment properties later in
1.5%. The European Central Bank (ECB), the month in an attempt to cool the local
however, signalled to the market that they housing market.
would increase bond buying to combat the
higher yields, and the German 10-year yield March 2021 was a positive month in equity
remained in negative territory. markets in New Zealand, as the NZX 50
index recovered from large losses in a select
During the month, the US also passed a few stocks in February.
US$1.3 trillion COVID relief bill, clearing the
Prepared by Makao Investments on behalf of Wealthpoint Limited.
Wealthpoint Market Update April 2021
March 2021 was a positive
month in equity markets in
New Zealand, as the NZX
50 index recovered from
large losses in a select few
stocks in February.
© Makao Investments Limited, all rights reserved.
Wealthpoint Market Update April 2021
Asset class performance to
31 March 2021
Source: Refinitiv Datastream, Makao Investments
Looking back
The end of March was almost exactly 20 years. In contrast, rising bond yields
in line with the one-year anniversary resulted in negative performance for
of the trough of the COVID-19 related defensive asset classes in the short-
sell-off in 2020. And since the rebound term. New Zealand fixed income has
in shares over the last year was strong, also returned negative returns over
performance numbers look great the last year, which is a poor outcome
relative to history, sitting comfortably relative to history.
in the top 5% of outcomes over the last
© Makao Investments Limited, all rights reserved.
Wealthpoint Market Update April 2021
New Zealand Dollar to
31 March 2021
Source: Refinitiv Datastream, Makao Investments
The New Zealand dollar depreciated
over the month against other developed
markets, taking a particularly large hit
when the government announced tax
measures on investment properties.
Over the last year, however, the New
Zealand dollar has risen relative to other
currencies as it rallied from lows, in line
with the economic recovery and the rise
in global equity markets.
© Makao Investments Limited, all rights reserved.
Wealthpoint Market Update April 2021
New Zealand shares
March 2021 performance, in %
Over the month, Fisher & Paykel Healthcare (FPH) regained ground
lost earlier in the year. Fletcher Building (FBU) continued its strong
rally, having now more than doubled in price from the end of March
last year.
A2 Milk (ATM), continued its pretty steady declines over the recent
months that were related to ongoing supply chain disruptions and
negative investor sentiment.
Meridian Energy (MEL) also continued to decline over the month
after a sharp rally at the end of 2020.
© Makao Investments Limited, all rights reserved.
Wealthpoint Market Update April 2021 Disclaimer The information in this document is provided for general information only and is not intended as advice. Past performance is not necessarily a good indicator of future returns. Data for this document has been sourced from Refinitiv Datastream, however the information contained herein is not guaranteed and does not purport to be comprehensive. © Makao Investments Limited, all rights reserved. wealthpoint.co.nz
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