Major indices in the US and Europe, as well as the MSCI World Index, outperformed the local share market last year according to a review by CommSec.
During 2021, the S&P/ASX 200 rose 13 per cent and the Australian All Ordinaries Index lifted 13.6 per cent.
In comparison, the S&P 500 gained 26.9 per cent, the Nasdaq lifted 21.4 per cent and the Dow Jones rose 18.7 per cent.
The STOXX 600 Index in Europe added 22.2 per cent for the year while the MSCI World Index, excluding Australia, rose 20.7 per cent in US dollar terms.
Both the ASX 200 and the All Ords ended 2021 between 1 and 2 per cent lower than their record highs set in August last year.
Locally, telecommunications was the top sector of the year with a gain of 28.5 per cent.
Property trusts (21.6 per cent), consumer discretionary (21.3 per cent) and financials (20.2 per cent) also outperformed during 2021.
Information technology (-2.8 per cent) and energy (-2 per cent) both recorded falls and were the worst performing sectors.
Other sectors that underperformed the ASX 200 included industrials (11.2 per cent), healthcare (8 per cent), consumer staples (7.1 per cent), materials (6.8 per cent) and utilities (4.6 per cent).
Looking forward, CommSec predicted that the Australian sharemarket will grow about 5 per cent during 2022.
“Economic activity (and profits) won’t receive the same boost from fiscal and monetary stimulus as that delivered in 2021,” noted CommSec.
“Having said that, the government will not be in a rush to remove support, and super low interest rates will remain over the majority of 2022.”
The firm highlighted this year’s Federal election as a key uncertainty in the year ahead.
“While the opposition Labor Party is currently well ahead in most opinion polls, a tight result or even a ‘hung’ parliament could potentially impact investor sentiment. But a centre-left government, as evidenced in the US, could see a big boost to government spending” said CommSec.
Inflation also remains a major concern for markets and the economy moving forward according to the firm.
