Market Wrap – May 2022

April 2022 in review.

Markets pull back


  • Despite generally good earnings news, it was another challenging month for investors following growing concerns about the slowing global growth outlook and the shorter-term risks surrounding inflation, a sharp lift in rates and the war in Ukraine.
  • International shares finished the month down -7.4% (hedged) and -3.2% (unhedged).
  • Australian shares were once again a relative outperformer, finishing the month at -0.8%, reflecting the high commodity sector exposure and low tech stock exposure relative to other international markets.
  • Emerging market shares fell once again on China lockdowns and rising energy prices, dropping by -0.2%.
  • Fixed income also remained under pressure, with international fixed interest falling -2.9% in April.


China’s lockdown strategy impacts


  • The majority of China’s most prosperous cities had some COVID-19 restrictions in place with Shanghai remaining the worst hit with a full lockdown in place for the month of April.
  • Shanghai plays a critical role as a port and logistics hub so the lockdown also caused supply chain disruptions far beyond the city.
  • China’s aggressive economic growth targets, including 5.5% GDP growth for this year, now look challenged while authorities focus on zero-COVID rather than supporting economic activity.


Rate hikes commence to cool inflation


  • Headline inflation in Australia rose to 5.1% year on year, the highest rate since 2001.
  • On 3 May the Reserve Bank of Australia (RBA) hiked the cash rate by 0.25%, which was more than expected, taking it to 0.35% and signalling more rate hikes ahead. This was the first rate lift in more than 11 years, and will likely stoke cost-of-living debates ahead of the federal election.
  • The US Federal Reserve (the Fed) took a similar approach lifting its benchmark rate to a 0.75% to 1% range on 4 May, its biggest increase in 22 years, with more rate hikes forecast in the coming months.





Major asset class performance (%)

Asset classes

1 month

12 months

5 years (p.a.)

Australian shares




International shares (hedged)




International shares (unhedged)




International emerging markets (unhedged)




International small companies (unhedged)




Global listed property








Australian fixed interest




International fixed interest




Source: JP Morgan and IOOF, 30 April 2022.

Indices: Australian shares: S&P/ASX 300 Accumulation | International shares (hedged/unhedged): MSCI World ex Australia Net | International emerging markets: MSCI Emerging Markets Net in AUD (unhedged) | International small companies (unhedged): MSCI World ex Aust Small Cap | Global listed property: FTSE EPRA/NAREIT Developed Rental Index ex Australia (hedged) | Cash: Bloomberg Bank Bill | Australian fixed interest: Bloomberg AusBond Composite 0+ Yr Index | International fixed interest: Barclays Global Aggregate Bond Index (hedged).

Please note: Past performance is not indicative of future performance.



Exchange rates

close on



change in 1 month


change in 12 months













Trade weighted index




Source: Bloomberg and IOOF, 30 April 2022. All foreign exchange rates are rounded to two decimal places where appropriate.

Please note: Past performance is not indicative of future performance.


Important information: This document is issued by IOOF Investment Services Ltd (IISL) ABN 80 007 350 405, AFSL 230703. IISL is a company within Insignia Financial Ltd ABN 49 100 103 722 (formerly known as IOOF Holdings Ltd) and its related bodies corporate. This document contains factual information only and is based in part on information obtained in good faith from third party sources. The information is current as at 4 May 2022. While this information is believed to be accurate and reliable at the time of publication, to the extent permitted by law, no liability is accepted for any loss or damage as a result of reliance upon it.
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Disclaimer: The information contained in this document is based on information believed to be accurate and reliable at the time of publication. Any illustrations of past performance do not imply similar performance in the future. To the extent permissible by law, neither we nor any of our related entities, employees, or directors gives any representation or warranty as to the reliability, accuracy or completeness of the information; or accepts any responsibility for any person acting, or refraining from acting, on the basis of information contained in this newsletter. This information is of a general nature only. It is not intended as personal advice or as an investment recommendation, and does not take into account the particular investment objectives, financial situation and needs of a particular investor. Before making an investment decision you should read the product disclosure statement of any financial product referred to in this newsletter and speak with your financial planner to assess whether the advice is appropriate to your particular investment objectives, financial situation and needs.