After a strong December, markets generally retreated in the month of January with Australian equities returning -0.8% for the month and international equities returning -2.4%.
The InvestSMART Balanced Portfolio returned -0.8% over the month of January. The overweight to Australian equities dragged on the portfolio slightly as markets were down but the underweight to the US and overweights to Emerging Markets and Europe contributed positively.
Australian REITs posted a negative return over the month of -4.7% which was a continuation of the trend we saw in the latter half of last year as investors inflation expectations have risen, bond proxies such as REITs have been impacted. This sensitivity to interest rates is why the portfolio is underweight REITs.
Within fixed interest the portfolio's exposure to Australian government bonds returned 0.6% for the month as did the exposure to Macquarie Income Opportunities Fund. It is worth noting that the exposure to the Macquarie Income Opportunities Fund has returned 5.2% over the past year compared to 2.2% for the broader Australian bond market and relative to cash which returned 2.0% for the year. Overall the Macquarie Income Opportunities Fund has been a positive contributor not only in terms of return but also in risk-adjusted terms in that it has generally been less volatile than bonds.
Since inception the portfolio is slightly behind its cash 2% objective by around 0.8% after investment fees.
The investment objective is to achieve a return of 2% above the RBA Cash rate per annum over five year rolling periods by investing in a diverse mix of asset classes covering Australian equities, international equities, property, infrastructure, alternatives, fixed interest and cash.
Growth of $10,000
Asset Allocation as at 31 JANUARY 2017
Source: Praemium, RBA
Returns are before expenses and fees. Returns are shown as annualised if the period is over 1 year. * Since Inception (SI) date is 29 December 2014.
|PERFORMANCE TO 31 JANUARY 2017||1 MONTH||3 MONTH||6 MONTH||1 YEAR||SI* (P.A.)|
|InvestSMART Balanced Portfolio||-0.76%||3.18%||1.39%||8.47%||4.73%|
|Morningstar Multisector Balanced Index||-0.77%||2.64%||0.60%||7.44%||5.81%|
|Excess to Benchmark||0.01%||0.55%||0.79%||1.04%||-0.45%|
|RBA Cash Rate 2%||0.30%||0.88%||1.77%||3.75%||3.96%|
|Excess to Objective||-1.05%||2.30%||-0.38%||4.72%||0.77%|
Peformance Summary to 31 January 2017
Contribution to Return 1 Month to 31 January 2017
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