Overview
Over the quarter ending 30 September 2014, the MSCI World Index
(ex-Aust) in local currency rose by 0.46%.
MSCI International (ex-Aust)
Index (local currency)
Outlook
Over the quarter US equities reached new highs, buoyed by
continued earnings growth. Although US growth is on a solid
footing, recent sharemarket gains have eroded the value proposition
somewhat. The cheap money that has helped keep company borrowing
costs low and encouraged investors to abandon the relative safety
of cash and buy shares, will soon fade with the imminent ending of
Quantitative Easing (QE). Nevertheless, while the US is preparing
to end QE, Europe is likely to extend monetary stimulus, which may
provide some support to its sharemarkets despite the relatively
poor fundamentals in that region. Further, while we expect
China's economy to slow in 2015, shares in that country are
already factoring in lower corporate profit outcomes.
