Portfolio review
The Northward Equity Income Fund (NEIF) declined 1.02% for the month of April. Option income was strong for the month, mainly captured from BHP Billiton, QBE Insurance, Sonic Healthcare, ANZ Bank, Brambles, CSR limited, Insurance Australia Group and Stockland Property Group. The Fund’s average market exposure during April was 48% and continues to be less than half the market exposure of the ASX100 Accumulation Index.
The S&P/ASX 100 Accumulation Index declined 1.93% for the month of April in what proved to be a volatile month. The inability of the market to break through the psychological 6000 Index level barrier saw some profit taking, and a 3.3% selloff in the last three days of the month, brought some caution to the market going into bank reporting season in May. Ongoing uncertainty around the Reserve Bank of Australia’s (RBA) future course of monetary policy weighed on investors. Positive Index movers over the course of the month included BHP Billiton, Origin Energy, Santos and QBE Insurance while Westpac Banking Corporation, Commonwealth Bank of Australia, and National Australia Bank were the biggest detractors. Offshore markets saw the US continue its rally with the S&P 500 climbing (+0.9%) and the Dow Jones (+0.4%). US reporting season kicked off with some strong earnings from Google, Amazon and Microsoft. Europe was mixed for the month of April with the UK up 2.8% and Germany down 4.3%. Greece continues to be front and centre and this at times weighed heavily on European markets. Asian markets were very strong with China’s Shanghai Composite Index (+18.5%) and Hong Kong’s Hang Seng (+13%) gaining after the Peoples Bank of China announced a larger than expected cut (1.0%) in the required reserve ratios for financial institutions in attempt to fuel lending. Oil saw a strong rebound as well with West Texas Intermediate (WTI) oil price closing at $US59.63 a barrel (+ 25.3%).The Australian dollar (AUD) closed strongly (+3.9%) at 0.7905 US dollars and this strength would be of some concern to the RBA.
