Diversified Portfolios - Intelligent Investor Growth - 31 January 2016

COMMENTARY

PORTFOLIO COMMENTARY

After a very merry Christmas on the share market, which saw the All Ordinaries Index gain 8% in the final two weeks of 2015, Santa took back all his presents in a tumultuous start to 2016, as fears over Chinese growth returned with a vengeance.

The All Ords ended the month with a loss of 5.4%. Our Growth Portfolio beat that by over 2%, but that will be scant consolation since it still fell 3%. Since inception in 2001, the portfolio has now returned 10.0% a year, compared to 7.2% for the All Ords.

Resources led the way down, with BHP Billiton, Origin Energy and South32 losing 14%, 13% and 8% for the portfolio. Only just behind were the portfolio’s ‘market-facing’ financial stocks, including IOOF Holdings (down 14%), Perpetual (down 11%) and Computershare (down 10.5%).

Against these, the plus side of the ledger was looking pretty thin, supported by some of the portfolio’s smaller stocks: billing software supplier Hansen Technologies (up 7%), serviced office provider Servcorp (up 6%) and probe steriliser Nanosonics (up 4%). ResMed supplemented these, with an 8% gain after a decent interim result.

Despite the volatility, the portfolio was happy with its positions and there were no additions or disposals during the month.

INVESTMENT OBJECTIVE

The investment objective is to achieve a return of 1% above the All Ordinaries Accumulation Index per annum over three year rolling periods by investing in a diverse mix of Australian equities and cash.

GROWTH OF $10,000

Income Reinvested

PEFORMANCE SUMMARY TO 31 JANUARY 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 1 July 2015.

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