Resilience shows

SHARE trade investors proved resilient in August with the overall performance reversing, though not totally eliminating, July’s decline. The Australian share market once again outperformed international markets. The Australian dollar rose during the month, reducing unhedged returns to local investors, according to research by InTech.

InTech senior consultant Dennis Sams said the value and growth indices moved together during the month. In August, managers overall provided positive returns. In July none of the managers surveyed by InTech achieved a positive return.

Only two managers, Maple-Brown Abbott and Tyndall, delivered positive returns for the year ending August 30. Maple-Brown attributes its stronger-than-average showing to a lower reliance on international shares.

Superannuation funds included in the InTech Growth Funds Survey have steadily been in-creasing their international exposure, currently holding around 24 per cent on average, up from 17 per cent five years ago.

InTech sees this trend as continuing, with the compulsory superannuation requirements bringing in more money than the local market is able to digest.

InTech believes it is essential that investors and fund managers maintain their diversification strategy for the long haul.

AMP Henderson Global Investors chief economist Shane Oliver believes while it is difficult to give a true valuation of both Australian and US stocks, further upside in both markets is still possible.

“As shares are extremely cheap versus bonds on this measure, there is still likely to be more upside in US stocks on a six to 12-month horizon,” he said.

This would suggest more upside in Australian stocks.

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