The SSgA Australian Equities 2014 Review found that earnings growth has decreased in recent years, with the market recording 2.5 per cent growth in 2014.
While the consumer staples and resource industries recorded negative price returns, alternate industries including healthcare, property, insurance, utilities and telecoms experienced outstanding sector performance, the report found.
Price return on energy and mining was down approximately 15 and 20 per cent respectively, and it is expected that the sector will continue to stall in 2015 as a result of slowing growth in China, SSgA said.
Moreover, SSgA expressed concern over the sectors driving Australian growth as the market moves away from mining-based growth.
As a result of increased market volatility, SSgA reported significant changes in portfolio positioning, most notably increases in financials, mining, telecoms and utilities.
“A balanced set of portfolio exposures is warranted given prevailing global macro uncertainty and shaky local earnings growth drivers.
“Where total returns are likely to be scarce, seeking certainty in earnings and prices is likely to be a good strategy," said SSgA
Looking to 2015, the report reinforces the importance of implementing a diversified investment strategy.
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