The NZX most-followed share benchmark rounded out its ninth-straight year of positive returns with a 15 per cent return, according to the latest data from index provider, S&P Dow Jones.
Since 2015 the S&P/NZX 50 Portfolio Index has more than doubled while growing over four-times in the nine-year period ending December 2020.
During the 2020 calendar year the main index rose almost 14.7 per cent, the S&P data shows, after jumping 5.5 per cent in the final month of the year and 16.3 per cent over the December quarter.
Last year the NZX index also significantly outperformed its Australian counterpart, the S&P/ASX 200, which eked out a 1.4 per cent gain for the 12-month period.
“A 1% gain in December finished a strong final quarter for the S&P/ASX 200,” the S&P note says. “Despite its 37% peak-to-trough decline in the first part of the year, the Australian benchmark completed 2020 with a positive total return; including dividends, it added 1%.”
The annual benchmark figures also provide some evidence of a resurgent value sector in 2020, at least in the Australian market. While the S&P/ASX 200 value index was down almost 6 per cent for the 12 months to the end of December – compared to more than 9 per cent and 15.7 per cent for growth and momentum equity factors, respectively – the long-suffering factor was a stand-out in the final quarter.
Value and ‘enhanced value’ S&P/ASX 200 indices were up over 18 per cent and 19.7 per cent, respectively, over the three months to December 31, against about 10 per cent for the growth benchmark.
However, value faded in the last month of 2020, falling into negative territory as both growth (up over 2.5 per cent) and momentum (almost 3.8 per cent) recovered.
S&P does not report on similar factor returns for the NZX but the end-of-year data shows annual sub-sector performance ranged from close to 26 per cent for small caps to 7.45 per cent for the mid-cap index.
Nonetheless, the November Aon Hewitt NZ investment update suggests the value flame flickered in the dying days of 2020 with value-focused strategy, the Devon Trans Tasman Fund, topping the return tables for the month, up 9.8 per cent for the 30-day period: for the 12 months to the end of November the same fund is bottom of the pack.
Most Australian and NZ fixed income indices dipped into negative territory in December but “all of our reported regional fixed income indices ended the year in the green”, the S&P report says.
“Top of the pack, the S&P/NZX Inflation-Indexed Government Bond Index finished the year with a total return of 12%,” S&P says.