Market Trends: The tug of war continued in June

The tug of war between growth and value exposures continued in June, with relative performance still broadly correlated with the movement in bond yields.

Indeed, the decline in bond yields encouraged a stronger rotation back into growth/technology/quality exposures in June at the expense of more value-oriented exposures such as energy and financials. Flat gold prices over the month also led to a pullback in global gold miners following strong performance.

On the value side, global banks eased 0.8%, while energy producers declined 1.5%. Global gold miners dropped 3.7%.

Offsetting these movements, the NASDAQ-100 returned 6.2% in AUD-hedged terms, while hedged global quality returned 3.4%.

With a return to more benign US inflation reports, along with ongoing euphoria around AI, the equity outlook remains encouraging despite higher valuations – especially in the US market.