That End of the Financial Year Summary

Like every other year, it is here – the end of one financial year and the start of another. It has been an unusual 12 months for the world, and certainly the markets. As they do, markets reacted to all developments – good and bad – with a positive or a negative movement.

We hope for our clients these past few months have been a time of reflection and getting used to the “new normal.” Although it has been a challenging time for many, it has been a great time to reflect on the goals that you achieved over the past financial year and to celebrate your accomplishments.

In many ways, barring the current situation in Victoria, we have been lucky in managing the current health crisis. The hope is that we can sustain this and emerge stronger, but that is only possible of course if we do this together and are disciplined in our behaviour and practices. Not unlike having a disciplined approach to investing.

In terms of the financial markets, the 2019/20 year started with volatile equities market which reflected the escalating tensions between the USA and China. However, from September, the markets viewed positively the agreement reached between the two nations and by late January/ February the markets were trading at a high. When news of COVID-19 started trickling in, it was not initially considered a significant event in terms of markets. But once declared a Pandemic, markets quickly reacted to the news and we witnessed a significant fall in March. This decline, although not the same level as during the GFC, was certainly faster.

The Pandemic and its impact saw the governments world-over react quickly and decisively to announce relief measures. This saw markets recovering from April onward.

Source: Factset, MWM Research, July 2020.


While we are still not out of the health crisis and the consequent economic impact, the last 12-months (6-months in particular) highlighted more than ever the importance of holding a well-diversified portfolio. There was wide dispersion in the equity returns, for instance, US equities substantially outperformed the other major markets (UK, EU) which underperformed. Across sectors too there was a wide differential in the performance. Technology was the best performing sector while Energy, Financials and Real Estate investment trusts performed extremely poorly. The Australian markets underperformed largely on account of the sector composition (overweight to Energy and Financial Services).

Whilst the volatility and the fluctuations in the markets will likely continue, holding a portfolio that is appropriate to your needs and well-diversified is crucial. Having the ability to access your Financial Adviser as a sounding board and to have discussions around any concerns should provide respite to our clients as they begin their journey into the new financial year.

Niyati Khanna (CFP® Professional, CA, MBA [Finance & Strategy]) is a representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.

Performance data shown represents past performance or simulated performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

Note: This material is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person or entity. Accordingly, to the extent that this material may constitute general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. This is not an offer or recommendation to buy or sell securities or other financial products, nor a solicitation for deposits or other business, whether directly or indirectly.


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