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.
Australian shares produced mixed results over the quarter. L1 Capital Long Short (+12.7%) was the standout performer, delivering a very strong gain driven by a broad cyclical recovery across travel, materials and building products. L1 finished the year with very strong performance (45.24%). Alphinity Australian Share (+3.0%) rose modestly, with gains in real estate, communications and industrial services offset by weakness in consumer staples, logistics and gold-related holdings. Greencape Broadcap (+2.7%) rose modestly, with real estate, materials and financials providing support. 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%) produced a positive return but lagged the small-cap benchmark, with industrials providing support but lower exposure to the strongest-performing sectors constraining returns.
International shares delivered strong gains across most strategies. T. Rowe Price Global Equity Hedged (+17.7%) led the international allocation, driven by strong stock selection in technology and targeted exposure to AI infrastructure. Artisan Global Discovery (+17.0%) generated a strong gain through favourable stock selection in health care, real estate and consumer discretionary. Life Cycle Global Share Hedged (+13.0%) benefited from overweight positions in financials, materials and emerging markets. Arrowstreet Global Small Caps (+13.9%) delivered a very strong return in line with the small-cap rebound, with broad-based gains led by information technology, industrials and financials. Vinva Global Alpha Extension (+10.3%) produced a solid absolute return, with cybersecurity and semiconductor holdings performing well. Barrow Hanley Global Share (+8.2) lagged the growth-led rally due to its value bias and lower technology exposure. Pzena Emerging Markets Value (-0.7%) fell modestly, as underweight positioning in information technology detracted. GQG Partners Global Equity (-4.5%) was the sole detractor, as an overweight to energy and underweight to technology outweighed positive contributions from utilities.
ATLAS Infrastructure Hedged (+5.1%) outperformed, with gains across regulated utilities, energy infrastructure and transport assets.
Artisan Global Discovery and Arrowstreet Global Small Companies were trimmed and Vinva Global Alpha Extension increased, broadening global equity exposure and reducing reliance on a small-cap recovery as the outlook for rate cuts and inflation has become more balanced.