The InvestSMART Fixed Income Portfolio produced a return of 0.5% over the month of January, which was broadly in line with the benchmark which returned 0.6%. Australian 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. Looking forward we believe that volatility in fixed income bond markets is likely and that the yield to maturity of around than 2% is insufficient to compensate investors for that risk. This also materially contributes to the risk of fall short of the medium term objective of outperforming. With that in mind we have invested around half of the portfolio in cash and a managed fund that invests predominantly in floating rate corporate bonds. This means that the portfolio will deviate from the stated benchmark from one month to the next but over the next three years we expect it should be less sensitive to interest rate changes.
Growth of $10,000
PERFORMANCE SUMMARY TO 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 22 December 2015.
|PERFORMANCE TO 31 JANUARY 2017||1 MONTH||3 MONTHS||6 MONTHS||1 YEAR||SI* (P.A.)|
|InvestSMART Fixed Income Portfolio||0.46%||-0.40%||-0.61%||2.39%||2.58%|
|Bloomberg AusBond Composite 0 Yr Index||0.61%||-1.01%||-2.08%||2.30%||3.30%|
|Excess to Benchmark||-0.15%||0.61%||1.77%||0.09%||-0.72%|
While every care has been taken in preparation of this document, InvestSMART Financial Services Limited (ABN 70 089 038 531, AFSL 226435) (“InvestSMART”) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This document has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this document, and see professional advice, having regard to the investor’s objectives, financial situation and needs. This document is solely for the use of the party to whom it is provided. This document has been prepared for InvestSMART by InvestSense Pty Ltd ABN 31 601 876 528, Authorised Representative of Sentry Asset Management Pty Ltd AFSL 408 800. Financial commentary contained within this report is provided by InvestSense Pty Ltd. The information contained in this document is not intended to be a definitive statement on the subject matter nor an endorsement that this model portfolio is appropriate for you and should not be relied upon in making a decision to invest in this product. The information in this report is general information only and does not take into account your individual objectives, financial situation, needs or circumstances. No representations or warranties express or implied, are made as to the accuracy or completeness of the information, opinions and conclusions contained in this report. In preparing this report, InvestSMART and InvestSense Pty Ltd has relied upon and assumed, without independent verification, the accuracy and completeness of all information available to us. To the maximum extent permitted by law, neither InvestSMART, InvestSense Pty Ltd or their directors, employees or agents accept any liability for any loss arising in relation to this report. The suitability of the investment product to your needs depends on your individual circumstances and objectives and should be discussed with your Adviser. Potential investors must read the PDS, Approved Product List and FSG along with any accompanying materials. Investment in securities and other financial products involves risk. An investment in a financial product may have the potential for capital growth and income, but may also carry the risk that the total return on the investment may be less than the amount contributed directly by the investor. Past performance of financial products is not a reliable indicator of future performance. InvestSense Pty Ltd does not assure nor guarantee the performance of any financial products offered. Information, opinions, historical performance, calculations or assessments of performance of financial products or markets rely on assumptions about tax, reinvestment, market performance, liquidity and other factors that will be important and may fluctuate over time. InvestSense Pty Ltd, InvestSMART Financial Services Limited, its associates and their respective directors and other staff each declare that they may, from time to time, hold interests in Securities that are contained in this investment product.