The recent strengthening of the Australian dollar has served to erode returns for unhedged investors in global equities, according to the latest Mercer Sector Surveys.
The surveys, covering July, revealed that while the Australian share market had posted its fifth consecutive monthly gain and while global share markets witnessed a robust rally, the strengthening Australian dollar had undermined some returns.
Mercer said the MSCI World ex-Australia gained 7.4 per cent in local currency terms, but with the Australian dollar strengthening against most major currencies, returns for unhedged Australian investors were eroded to 5.4 per cent.
The Mercer analysis said emerging markets (up 8.2 per cent) had outperformed other regions in Australian dollar terms.
