Diversified Portfolios - Intelligent Investor Equity Income - 31 May 2017
For most of this financial year, the Intelligent Investor Equity Income Portfolio has been struggling to keep up with the surging banking sector. But there was a sharp turnaround in May, with the big four banks giving up a whopping 12%, on average, due in large part to the Government’s plan to impose a levy amounting to around 4% of their net profit.
Since they contribute around 25% of the All Ordinaries Index, that knocked it down by about 3% alone, largely accounting for its 2.6% fall. Our Equity Income Portfolio only holds around 10% in the big banks, so the drag on it was closer to 1%, and it managed to overcome that to post a flat performance.
The best performers for May were Ainsworth Game Technology (up 19%), Flight Centre (up 14%) and Sydney Airport (up 8%). Besides the banks, GBST was the worst performer, falling 8%.
| PERFORMANCE TO 31 MAY 2017 | 1 MONTH | 3 MONTH | 6 MONTH | 1 year | SI* (P.A.) |
|---|---|---|---|---|---|
| Intelligent Investor Equity Income Portfolio | -0.12% | 5.67% | 7.22% | 11.21% | 14.16% |
| ASX All Ordinaries Accumulation Index | -2.58% | 1.28% | 6.88% | 10.23% | 7.58% |
| Excess to Benchmark | 2.46% | 4.39% | 0.34% | 0.98% | 6.58% |
Important Information
While every care has been taken in preparation of this document, InvestSMART Financial Services Pty 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 any forecasts. Past performance is not a reliable indicator of future performance. This document has been prepared to 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, and if appropriate seek professional advice. 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. InvestSMART 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, or their directors, employees or agents accept any liability for any loss arising in relation to this report. 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. InvestSMART 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. InvestSMART, its associates and their respective directors and other staff may, from time to time, hold interests in Securities that are contained in this investment product.
Frequently Asked Questions about this Article…
The Intelligent Investor Equity Income Portfolio is an investment strategy designed to generate income through equity investments. It focuses on providing a steady income stream while also aiming for capital growth.
In May 2017, the Intelligent Investor Equity Income Portfolio managed to post a flat performance despite the challenges faced by the banking sector, which saw a significant decline.
The big four banks experienced a decline in May 2017 due to the Australian Government's plan to impose a levy that would amount to around 4% of their net profit, leading to an average drop of 12%.
In May 2017, the best-performing companies were Ainsworth Game Technology, which rose by 19%, Flight Centre, which increased by 14%, and Sydney Airport, which went up by 8%.
The ASX All Ordinaries Accumulation Index fell by 2.58% in May 2017, largely due to the decline in the banking sector.
The Intelligent Investor Equity Income Portfolio outperformed the ASX All Ordinaries Accumulation Index over various time frames, including a 2.46% excess return in May 2017.
Investing in the Intelligent Investor Equity Income Portfolio involves risks such as market fluctuations, potential for capital loss, and the possibility that returns may be less than the initial investment.
No, past performance is not a reliable indicator of future performance. Investors should consider their own financial situation and seek professional advice before making investment decisions.
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