The Australian Equity markets continue to range trade between 4,500 and 5,000, although the rise of 5.13% in the ASX200 in March only just managed to claw back losses in January to be up 0.10% YTD. As a result, with April's decline of -1.4%, and following the sharp falls in May MTD, the market is basically back to levels last seen in September 2009.

That puts in stark perspective the extent of the rally since March 2009 which effectively took the market up 50% in just six months, but still left it a long way short of the November 2007 peak.

Meanwhile in contrast, Australian Fund Monitor's index of Australian hedge and absolute return funds has almost regained the previous high water mark, set in October '07, after adding 2.64% in March to be up 1.41% YTD.

April's results are just starting to come in, and based on this small sample it looks as if the month will be reasonably flat against the ASX's -1.4%. What had shaped up as a positive result gave way in the final week of the month as Europe's debt and fiscal woes continued to weigh on markets, and coming at the end of the month left managers with little chance to adjust portfolios to reflect the increase in risk.

The local market has sold off further (as at 5th May), not only on concerns over Greece and Europe, but as a result of proposed changes to Australia's tax regime announced last week-end.

The changes followed a major review of Australia's taxation system (excluding a major component, the broad based consumption tax, or GST) which made over 100 recommendations, of which only a handful have been acted on.

The most significant aspect of these was the introduction of a proposed "Resource Super Profits Tax" on Australia's mining sector from FY 2012, which although well flagged prior to the announcement, has subsequently stunned investors. Of interest to the fund management sector was the proposed increases in the compulsory superannuation levy from 9 to 12% by 2020.