Commodities and direct property top performing asset classes in FY22

Commodities and direct property were the only major asset classes that posted returns above inflation in FY22, albeit underlying direct property valuations were outdated, according to asset consultancy Atchison’s analysis.

The firm’s principal, Kev Toohey, said it meant that all major equity and fixed interest asset classes Australian investors were exposed to have moved backwards in inflation-adjusted terms over the past 12 months.

At the same time, emerging markets (EMs), small cap equities and global government bonds were the worst three performing asset classes measured over FY22.

Also, the majority of major markets underperformed inflation for the first time since FY09.

According to Toohey, FY22 saw marginal differences between Australian equities, unhedged developed market equities and hedged developed market equities, meaning all three were roughly as bad as each other when measured for 12 months to 30 June, he said.

Toohey also said that all major investment styles, including value, growth and momentum, posted negative returns over the past year in local terms.

The same was true for all major sectors other than the energy and utilities sector.