Global share markets rebounded strongly over the June quarter as investor confidence recovered following the March sell-off. Resilient corporate earnings and renewed enthusiasm for artificial intelligence drove a broad recovery in risk assets, while easing geopolitical tensions in the Middle East helped improve sentiment. Late in the quarter, a tentative US-Iran memorandum of understanding reduced concerns around energy supply disruptions, contributing to a sharp fall in oil prices. While this supported market sentiment, the agreement remained fragile, and uncertainty persisted around shipping routes and regional energy infrastructure. Against this backdrop, easing inflation concerns and interest rate expectations remained important drivers of market performance.
Australian shares delivered positive returns but lagged major global markets, with the S&P/ASX 200 Index rising +4.0%. Improving investor confidence supported broad gains across the market, led by consumer discretionary, information technology and materials, while industrials and real estate also recorded solid gains. In contrast, the sharp decline in oil prices weighed heavily on the energy sector, while healthcare also detracted following weaker sector earnings. Smaller companies participated in the recovery but slightly underperformed larger peers, with the S&P/ASX Small Ordinaries Index rising +3.3%.
International shares delivered exceptional gains, with the MSCI All Country World Index rising +13.6% unhedged and +14.9% hedged. US shares advanced strongly as robust corporate earnings and renewed optimism surrounding AI supported technology and growth sectors. European markets also delivered strong returns as easing energy prices and improving economic confidence lifted investor sentiment, while Japan benefited from a weaker yen, AI enthusiasm and resilient domestic conditions. Emerging markets outperformed developed markets, with the MSCI Emerging Markets Index rising +22.6%, driven by exceptional gains across Asia, particularly Korea and Taiwan. China was a notable exception, declining over the quarter amid ongoing concerns about its economic outlook. Global small companies also rebounded strongly, with the MSCI World ex Australia Small Cap Index rising +14.0%.
Property and infrastructure delivered positive returns over the quarter. Global listed property performed well, with the FTSE EPRA NAREIT Developed Index (hedged) up +8.8%, supported by improving sentiment towards interest rate-sensitive assets and lower bond yield volatility. Infrastructure also advanced, with the FTSE Global Core Infrastructure 50/50 Index (hedged) rising +2.6%, underpinned by its defensive earnings profile and continued demand for essential infrastructure assets.
Fixed interest markets delivered positive returns over the quarter. Australian fixed interest outperformed global peers, with the Bloomberg AusBond Composite 0+ Yr Index rising +2.6% as domestic bond yields declined. Global fixed interest also advanced, with the Bloomberg Global Aggregate Bond Index (hedged) up +1.5%, despite US Treasury yields finishing slightly higher over the quarter. Credit markets also delivered positive returns, with high-yield credit outperforming investment grade markets as resilient corporate fundamentals and tightening credit spreads supported investor demand for higher-yielding assets.
Australian shares were broadly positive. Greencape Broadcap (+2.7%) rose modestly, with strength in materials, REITs and financials partly offset by weakness in consumer discretionary, communication services and utilities. Alphinity Australian Share (+3.0%) gained on the back of real estate, communications and industrial services. Allan Gray Australia Equity (+1.4%) lagged, with substantial healthcare and energy exposure constraining returns despite an overweight in materials. However, Allan Gray provided strong performance for the year (+14.73%). Australian Eagle Trust (-1.2%) declined as weakness in selected long positions and gains among lower-quality short positions outweighed support from insurance and resources. Macquarie Australian Small Companies (+2.2%) lagged, with lower exposure to the strongest-performing sectors limiting upside despite support from industrials.
International shares delivered broadly strong returns over the quarter. T. Rowe Price Global Equity Hedged (+17.7%) delivered an outstanding return for the quarter, led by strong stock selection within technology and exposure to the AI infrastructure supply chain driving exceptional gains. Artisan Global Discovery (+17.0%) also delivered a strong result through favourable stock selection within health care, real estate and consumer discretionary. Life Cycle Global Share (+11.4%) benefited from overweight positions in financials, materials and emerging markets. Barrow Hanley Global Share (+8.2%) gained solidly, although somewhat hampered by its value bias and lower technology exposure constraining participation in the growth-led advance. Pzena Emerging Markets Value (-0.7%) fell modestly, with underweight positioning in information technology detracting despite support from financials and health care. GQG Partners Global Equity (-4.5%) declined as an overweight to energy and underweight to technology outweighed favourable positioning in utilities and reduced China exposure.
Property and infrastructure assets performed strongly. Quay Global Real Estate AUD Hedged (+10.4%) captured the broad rally in global listed real estate, with currency hedging providing a modest additional boost. ATLAS Infrastructure Hedged (+5.1%) outperformed, with gains across regulated utilities, energy infrastructure and transport assets.
Fixed interest delivered strong returns across the portfolio. Western Asset Australian Bond (+2.8%) benefited from a modest duration overweight and favourable positioning across corporate credit and semi-government holdings. AB Dynamic Global Fixed Income (+2.5%) generated strong income and capital returns through selection within investment-grade and high-yield corporate credit. PIMCO Global Bond Wholesale (+2.3%) gained through overweight positions in securitised assets and favourable Eurozone duration positioning. Yarra Enhanced Income (+2.3%) was supported by duration, credit spread compression and carry, with subordinated debt a standout.
AB Global Dynamic Fixed Income was trimmed and PIMCO Global Bond was increased to take advantage of more attractive yields now available in global bonds