The Australian share market continues to be a disappointment for long term investors.
In its last session for the year, the S&P/ASX 200 index is trading just 1.0 per cent lower in 2015, making it two years in a row that market levels have barely changed.
The benchmark had ended only 1.1 per cent higher in 2014.
The local market briefly threatened to breach the 6,000 barrier early in the year, but an extended slump in global crude oil and commodities prices instead pushed the index to a low of 4,910 late in the year.
The index was dragged down by the battering in energy and materials stocks - making the two sectors the worst performing for the year. Even banks, a firm favourite with yield-hungry self-managed super funds, ended nearly flat for the year.
"A lot of money is coming out of the mining and energy sectors and every year, these two sectors are becoming less important," CommSec analyst Steven Daghlian said.
The Australian market's poor performance was broadly in line with the negative returns delivered by most major markets this year, he said.
Other market players, however, believe the ASX did manage to deliver decent returns.
"The total return on the index is actually 4.6 per cent when one factors in dividend payouts - still better than putting your money in a term deposit for the year," IG's market analyst Angus Nicholson said.
Even among the worse performing sectors, dividends payouts have helped push returns for some stocks into positive territory, he added.
Beyond the stagnant headline returns, analysts are confident the dramatic restructuring that the ASX has undergone in the last two years is a change for the better.
While the market used to be materials-focused earlier, it is a lot more diversified now.
The materials sector now accounts for only about 20 per cent of the index, while energy weightage is also much smaller. Instead, banking and consumer stocks are becoming increasingly important.
Banks, in fact, now account for 48 per cent of the weightage in the main index.
The revamp is opening up opportunities for canny investors.
"The ASX performance this year goes to show its really a stockpickers' market. You have got to choose your sectors," Mr Nicholson said.
He points to less popular sectors such as healthcare, utilities, industrials and real estate investment trusts (A-REITs), which broadly avoided the market sell-off this year and averaged returns between 10 to 16 per cent.
The changes also mean the driving forces for the ASX in 2016 will be a lot different than in 2015.
"The impact of materials and energy prices is not as dominant. Now most eggs rest in the financials basket, so its important to see how the sector performs," Mr Nicholson said.
Other key factors that will influence the Australian market include how China manages its slowing economy, and how many rate rises are unveiled by the US Federal Reserve, he said.
ASX SECTOR TOTAL RETURNS IN 2015:
* Utilities - 23 pct
* Consumer discretionary - 19 pct
* Industrials - 16 pct
* Healthcare - 16 pct
* Materials - (-)15 pct
* Energy - (-)24 pct
Source: IG
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