Diversified Portfolio - Balanced - 29 February 2016

InvestSMART Balanced Portfolio February Report
By · 3 Mar 2016
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By ·
3 Mar 2016
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The volatility surrounding Australian and global equity markets experienced in December and January continued in the month of February. The local equity market was down 1.7% for the month, as were global equity markets. Emerging market equities were down 1.1%, performing better than their developed market counterparts.

Australian REITs were the standout performer over the month, returning 2.8% for February (as measured by the S&P/ASX 300 A-REIT Accumulation Index). Global property was relatively flat for the month, posting a return of 0.1% (as measured by the FTSE EPRA/NAREIT Developed REITs AUD Hedged NR Index).

Within fixed interest, Australian bonds posted a return of 1.0% over the month of February (as measured by the Bloomberg AusBond Composite Bond Index) while global bonds returned 1.1% (as measured by the Barclays Global Aggregate Bond Index AUD Hedged). Cash returned 0.2% over the month as measured by the Bloomberg AusBond Bank Bill Index.



The InvestSMART Diversified Balanced portfolio returned -0.2% over the month of February, outperforming the benchmark. The exposure to Australian equities was the main drag on the portfolio as was exposure to credit securities within the fixed interest portion of the portfolio. Exposures to US equities and cash contributed to performance relative to the benchmark.

Within the InvestSMART Diversified Balanced portfolio the Australian equity exposure via the MSCI Australia 200 ETF returned -1.87% over the month which was the single biggest detractor to performance in the portfolio. Within international equities, the iShares Core S&P 500 ETF and iShares Core S&P Mid-cap ETF were the best performing securities, while the Vanguard All-World ex US Shares Index ETF and iShares Europe ETF dragged on performance. The MSCI Emerging Markets ETF was relatively flat over the period.

Within property, global property (via the SPDR Dow Jones Global Real Estate Fund ETF) returned 1.5% for the month of February. The Australian property exposure (via the Vanguard Australian Property Securities ETF) also returned 1.5% for the month.

Within fixed interest, the iShares Composite Bond ETF returned 0.9%, while the Macquarie Income Opportunities Fund returned -0.3%. The BetaShares Australian High Interest Cash ETF returned 0.3% over the month.



Growth of $10,000

Income Reinvested

Asset Allocation as at 29 February 2016

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.


The portfolio continues to remain overweight Australian equities on the basis that valuations continue to appear reasonably compelling when compared to other asset classes and given the attractive yield characteristics of the asset class. Within fixed interest the portfolio holds Australian government bonds and has an exposure to Australian credit and overseas securities. The portfolio is expected to do well in an environment where Australian equities outperform other asset classes and where credit outperforms government bonds.

InvestSMART Balanced Portfolio -0.18% -2.74% -1.82% -4.05% 1.73%
Morningstar Multisector Balanced Index -0.31% -1.63% -0.67% -1.69% 2.75%
Excess to Benchmark 0.13% -1.11% -1.15% -2.36% -1.02%
RBA Cash Rate 2% 0.32% 1.00% 2.00% 4.12% 4.16%
Excess to Objective -0.49% -3.73% -3.82% -8.16% -2.43%

Peformance Summary to 29 February 2016

The InvestSMART Diversified Balanced portfolio returned -0.2% over the month of February, outperforming the benchmark but underperforming the RBA Cash Rate 2% objective. Since inception the InvestSMART Diversified Balanced portfolio is behind of its benchmark by 1.02% and its cash-plus objective by 2.43%.

Portfolio Objective

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.

Contribution to Return 1 Month to 29 February 2016

Important Information

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.

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