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16 May 2024

Home / White Papers 2023

2023 Portfolio Compass: Australian Equities

  •   VanEck
  •   19 January 2023
  • 2
  •      
  •   

Introduction

The wave of liquidity that flooded markets in 2020 in the wake of the COVID-19 crisis set new records. What followed was the most aggressive tightening cycle since the early 1980s, with 2022 heralding in a new world order, and markets and some sectors started rhyming with outcomes akin to the Global Financial Crisis (GFC) and dot-com bubble. For the first time since 1994 both bond and equity markets were down.

Huge hits were felt across the tech sector and more broadly across US and UK equities, to name a few. However, Australian equities, as represented by the S&P/ASX 200 was one of the best performing asset classes in 2022 thanks to a Q4 resources rally and higher ‘value’ exposure relative to other country equity benchmarks. The S&P/ASX 200 was down 1.08% over the year. The best performing sector was energy up 49.0% and the worst performing was information technology which fell 33.7% over the year. In terms of size, large caps significantly outperformed small caps and were up 1.89% for the year compared to midcaps which fell 6.3% and small caps down 18.3%.

According to the 2022 VanEck Australian Investor Survey, Australian equities is going to be the go-to investment destination in 2023 with 70% of respondents planning to invest.

For investors, the question is which sectors should be considered for 2023.

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