Markets looked through significant geopolitical turbulence to reach new highs in April, with global equities staging a powerful rally as war fears subsided.
The All Ordinaries Accumulation Index rose 2.4% for the month. Growth Equities returned +2.9% and has returned +20.7% over the rolling one year. Balanced Equities returned +1.0% and has returned +25.2% over the rolling one year. High Conviction returned +3.8% and has returned +14.2% over the rolling one year. The All Ords Accum. has returned +10.0% over one year.
The Enhanced Yield strategy returned +0.53% for the month and has returned +5.65% over the rolling one year. The RBA hiked the cash rate to 4.35% in early May, which will feed through into forward returns for the strategy.
Market Context
The dominant story in April was a rotation back into global tech stocks. The S&P 500 and Nasdaq hit all-time highs and emerging markets surged. Commodities gained 4.2% with energy and industrial metals leading, reflecting elevated oil prices and increasing demand for materials underpinning the global AI data centre buildout.
Tensions between the US and Iran continued, with the Strait of Hormuz severely disrupted and Brent crude pushing above $110 per barrel. Oil and gas prices are driving inflation higher globally and forcing a government policy rethink on how to manage it. Locally we have seen excise cuts (lowering federal income), free public transport (lowering state income), with the flipside being more tax and higher prices.
The Reserve Bank took its own path of action by hiking the cash rate to 4.35% in early May. Ignoring what has been a hefty fiscal and household budget tightening courtesy of the war, they decided the risk of inflation running out of control was too great. We expect rates to stabilise at this level for the foreseeable future. Good news for investors enjoying 0.25% extra enhanced yield income over the coming year.
April 2026 Newsletters:
Positioning and Outlook
Across the strategies we remain significantly underweight banks and own zero of the big four in Growth and High Conviction. We are avoiding Australian cyclicals and expensive defensives. We are positioned for an environment of persistent inflation, elevated commodity prices and continued global earnings momentum.
Quality businesses with strong competitive positions and durable earnings are trading at reasonable valuations. We are deploying cash into stocks that have sold off to attractive levels, and resource exposures remain well supported by elevated commodity prices.
For businesses delivering consistent earnings growth, strong cash flow and balance sheet discipline, fundamentals remain the primary driver of long term returns.
Any questions please give us a call.
The Endeavor Team
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*Note: Performance of the strategy group is representative of individual client portfolios, although performance can differ due to inherent differences between clients portfolios such as initial entry timing, legacy holdings or requested stock exclusions. Performance measured is after fees, taxes and franking credits. Monthly performance figures include an accrual for fees charged quarterly.
