Globally, equity markets were positive in August. In the US, the S&P 500 rose +2.3%, the Nasdaq increased +0.7%, whilst in the UK, the FTSE was flat (+0.1%). In Australia, the All Ordinaries Accumulation Index increased +0.4%. The top performing sectors on the ASX were technology and gold, whilst energy was the worst performer.

Reporting season on the ASX saw the vast majority of listed companies report their results for the six months to 30 June. Overall, we viewed it as a solid reporting season, albeit with less strong earnings "beats" than in previous reporting seasons. Large cap stocks materially outperformed small/mid cap stocks (which the fund has a strong exposure to), with the ASX Small Ordinaries index falling -2.0%. Resources and mining services stocks underperformed as sentiment towards to Chinese economy continues to be weak. On the positive side, central banks both globally and in Australia appear on the cusp of cutting interest rates, which should be beneficial for economic growth, company earnings, and general investor sentiment towards equities. 

In bond markets, the US 10-year bond rate fell -28 basis points (bp) to close at 3.86%, whilst its Australian counterpart fell -15 bp to 3.97%. The driver of lower bond rates was data showing economic growth in the US to be slowing. In currencies, the A$/US$ appreciated +2.2 cents to close at US$0.68.