The company’s Market Watch for April 2013 found that global equity markets were predominantly stronger this month, with the MSCI world index gaining 2.9 percent.
The review also highlighted the effect of aggressive monetary policy in Japan.
“Global equity markets were predominantly stronger in April following stimulus measures announced in Japan,” CFSGAM said.
The review also pointed out that the move by BoJ could “force some Japanese investors to search for a higher yield outside Japan”.
Although generally positive, there were, however, some notable exceptions in global equities. The Chinese markets were weaker, with the Shanghai composite index down 2.6 per cent and Korea falling by 2 percent on the back of geopolitical concerns.
In Europe, there was an element of stabilisation with the outcome of the Italian election.
“European equity markets were all stronger, with Italy the strongest performer. That market rose 9.3 percent on improved political stability,” Colonial stated.
In the United States it was a mixed picture, with positive news in housing data, but this was tempered by US employment data being weaker than expected.
Fixed interests continued to offer lower yields. However, Colonial pointed out that “yields were extremely volatile, suggesting that the BoJ action has produced some market uncertainty”.
Commodity-dominated markets also tended to struggle with a particularly large fall in gold prices, which were down 7.6 percent following their two-day snap crash earlier in the month.
Domestically, Aussie equities resumed their rally in April, with the S&P/ASX 200 accumulation index adding 4.5 percent. However, investors maintained a clear preference for stocks which offer a relatively stable dividend yield.
Interestingly, Aussie property also performed well, with listed property securities rising by 8.2 percent, while even government bonds got a boost, rallying sharply off the weaker global data and the BoJ monetary policy.
