Key performance figures for 2015
- ASX S&P 200 ended down at -2.13% for 2015
- US S&P 500 ended down -0.73% for 2015
- Eurostoxx50 (SX5E) ended up 4.85% for 2015
- S&P Asia 50 ended down -8.73% for 2015
- Goldman Sachs Commodity Index (GSCI) ended down -34.06% for the year
- Australian GDP for 2015 is approaching 2.5%**
**Australian Bureau of Statistics (Seasonally adjusted Sep Qtr 2014 – Sep Qtr 2015)
Biggest investment trends of 2015
- High volatility, with little direction. Much of this was caused by events in China.
- Chinese economic slowdown. The Chinese market moved into bubble territory throughout the beginning of 2015 driving global markets progressively higher until it popped on the 12th of June. A number of ‘aftershocks’ followed with the Shanghai composite index losing -8.49% on “black Monday” on the 24th of August and a further -7% on the 25th of August. A full year’s growth was lost. This put a dampener on world markets.
- The continued decline of the commodity sector placed further pressure on our markets. The S&P ASX 200 Materials (XMJ) index, incorporating a broad spectrum of Australian commodity companies, was down -18.94% for 2015.
- A change of leadership of Australia’s federal government saw business confidence improve and it revitalised the conversation around much needed tax reform. This should be a positive for business and the markets.
Key performance estimates for 2016
- The RBA has forecast Economic growth in Australia of between 2 to 3%
- On average the big four banks have predicted GDP growth in 2016 will be 2.8% (slightly below the ten-year average of 3.3%)
- USA will approach full employment leading to inflationary pressures, which will eventually lead to an increase and normalization of interest rates
- US GDP growth for 2016 is forecast to be 2.2%*
- China’s growth is expected to moderate to 6.4%*
- India is set to become the darling of Asia with forecast growth of 7.8%*
*Goldman Sachs research and forecasts.
Investment trends for 2016
- Fin-Tech development & technology disruption. The recent Turnbull Government innovation statement sees the fires stoked in Australia’s fledgling fin-tech sector. Technology company Atlassian, with their recent $3.8 Billion (AUD) IPO, is the poster child of the buoyant Australian tech sector with fin-tech hubs emerging across capital cities, and with government support, this sector is poised for growth. What to watch - Equitise, crowd sourced equity investment platform (disrupting venture capital), Peer to Peer lending (disrupting banking) and “robo-advice”, the emergence of automated saving and investment platforms (disrupting financial advice businesses).
- Sustained commodity downturn. This is likely to continue with “CapEx” commodities like steel, coal, cement and iron hit hardest. “OpEx” commodities are expected to fare better (i.e. operational commodities like oil, kerosene, soybean & coffee etc.) An article in the financial times provides a more in depth analysis on the commodities sector.
- China slows - Asia grows. China might be slowing down and normalising, but growth opportunities present themselves in the Philippines, India and Indonesia, supported by low oil prices reducing costs for these net importers of energy. View the Macroeconomic outlook from Goldman Sachs which is a succinct video summary of what’s ahead in Asia.
- Sustained lower interest rates. US interest rates might be due for a rate raise but Australia’s economy is a long way from providing just cause for the RBA to raise ours. We expect rates to stay at or close to 2.00% throughout 2016. If they move the most likely way is up, and if this happens we should all cheer because it means the economy is performing better than everyone expected.
Latest at Snowgum
Not surprisingly, 2015 has by all measures been the biggest year yet for Snowgum Financial Services!! After launching in April, we have had the opportunity to provide a full range of financial services to our growing client base of successful individuals and companies, all the while maintaining our independence from institutional influence.
We have successfully rolled out a client investment portal which centralises client investment data, from multiple sources and across multiple entity structures, under one easy to access and view client login. This technology development streamlines investment transparency, administration, reporting and simplifies your accountant’s life by consolidating all relevant financial and tax information. We have also introduced a private banking service that facilitates client’s lending requirements, which can be quite complex.
We are focused on making sure that the developments and improvements emerging across the ever changing finance industry can be quickly incorporated into the services we provide clients. With this in mind, we already have a number of technology upgrades planned for 2016, with the goal of becoming a market leader in how we interact with our clients and strategic partners.
We look forward to working with and guiding our clients through their personal and professional milestones by providing a financial foundation that can support their growth.