Funds Update

Market Review

2006 is now past, and what a year it was – positive returns across all asset classes, with only bonds failing to deliver returns in the double digits. Some highlights from last quarter include:

• The Australian equity market powered on in Q4, shrugging off a rate hike to rise 11.1%.
• Strong corporate earnings and merger/acquisition activity drove the global sharemarket 7% higher in Q4.
• The bull run for global property continues, returning 11.5% in Q4.
• Rising yields negatively impacted bonds markets. Australia rose 0.3%, International +1.1% over the quarter.
• Small mining stocks were the key driver of Australian small caps outperformance.
• A weaker US currency saw the Australian dollar gain 3.6% over the year against the trade weighted index.
• Inflows from offshore REIT funds saw LPTs gain 14%.
• Q4 saw a surge in private equity buying of listed assets, with 2007 tipped as another record year for such deals.

“Remaining disciplined and focused on long-term outcomes are the key to this year’s financial resolutions.”

Just as a good set of new year’s resolutions can help in your personal life, so too can they help you achieve your financial goals. Remaining disciplined and focused on long-term outcomes are the key to this year’s financial resolutions. Whether 2007 turns out to be another stellar year like 2006, or quite the opposite, investors need to remember it is just one year in what should be a multi-year plan.

Unlike many other resolutions that may go unfulfilled, if you keep your financial ones there will be many more happy returns to come.

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