Monthly Highlights:
- Global share markets continued to advance in May, supported by resilient corporate earnings, improving confidence in the global growth outlook and ongoing investment in artificial intelligence-related infrastructure. While geopolitical risks and inflation concerns remained in focus, easing energy prices and stronger investor sentiment helped support gains across major markets. Bond markets also stabilised later in the month as yields eased from elevated levels.
- Australian shares delivered positive returns but continued to lag major offshore markets. Gains were led by materials, as copper prices surged on expectations of stronger demand from AI infrastructure and electrification trends. Healthcare and energy were among the weaker sectors, with healthcare pressured by sector-specific earnings concerns and energy giving back some of its earlier strength as oil prices eased. Smaller companies outperformed larger peers as participation broadened across the market.
- International shares produced another strong month of returns across both developed and emerging markets. The US remained a key driver of performance, supported by technology and growth companies, while Europe and Japan also posted solid gains. Emerging markets outperformed, led by strength in Korea and Taiwan, where companies linked to semiconductor production and AI supply chains continued to benefit from strong investor demand.
- Australian and global fixed interest markets delivered positive returns in May as bond yields eased from their intra-month highs. Australian bonds outperformed following softer inflation and labour market data, prompting investors to scale back expectations for further interest rate increases following the RBA’s recent tightening cycle. Credit markets remained resilient, supported by healthy corporate fundamentals, although inflation and geopolitical risks continued to temper sentiment.
