Diversified Portfolios - InvestSMART Balanced - 30 November 2016
InvestSMART Balanced Portfolio November Report
Global and Australian equity markets were up over the month of November, returning 4.5% and 2.8% respectively. The US surprisingly performed particularly strongly on the back of Trump's win in the US presidential election on the basis that tax cuts and other stimulatory measures may prove to be inflationary.
The InvestSMART Balanced Portfolio returned 1.15% over the month of November. Despite being underweight US equities which was one of the best returning segments, the portfolio still managed to post a return broadly in line with the composite market benchmark. The main contributors to performance was the overweight to Australian equities and the underweight to fixed interest which were impacted by rising bond yields.
Australian REITs posted a positive return over the month of 0.75% which was a slight rebound from the -7.7% they lost in the previous month. The portfolio's global property exposure returned 1.2% for the month.
Within fixed interest the portfolio's exposure to Australian government bonds returned -1.5%. The exposure to Macquarie Income Opportunities Fund outperformed the broader bond market, returning -0.5%%, which was a key contributor to the portfolio's overall return. Cash returned 0.16% for the month.
Since inception the portfolio is slightly behind its cash 2% objective by around 0.1�ter investment fees.
The investment objective is to achieve a return of 2% above the RBA Cash rate perannum over five year rolling periods by investing in a diverse mix of asset classescovering Australian equities, international equities, property, infrastructure,alternatives, fixed interest and cash.
The portfolio remains overweight Australian equities on the basis that valuations 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 also underweight REITs. The portfolio is expected to do well in an environment where Australian equities outperform other asset classes and where credit outperforms government bonds. Within international equities the portfolios have a bias towards emerging markets and an underweight to US equities, therefore the portfolio will benefit when US equities underperform broader equity markets and emerging markets do well.
Current market pricing implies that the portfolio's RBA Cash Rate 2% objective is achievable over the long-term but only through a reasonable allocation to relatively volatile equity investments. This means that investors should be comfortable with above average volatility, which could result in a short-term fall in the portfolio's value of around 20%.
Growth of $10,000
Asset Allocation as at 30 NOVEMBER 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.
|PERFORMANCE TO 30 NOVEMBER 2016||1 MONTH||3 MONTH||6 MONTH||1 YEAR||SI* (P.A.)|
|InvestSMART Balanced Portfolio||1.15%||-0.71%||0.72%||3.50%||4.07%|
|Morningstar Multisector Balanced Index||1.10%||-0.85%||0.78%||4.42%||4.82%|
|Excess to Benchmark||0.05%||0.15%||-0.06%||-0.92%||-0.75%|
|RBA Cash Rate 2%||0.29%||0.87%||1.80%||3.84%||4.00%|
|Excess to Objective||0.86%||-1.58%||-1.08%||-0.33%||0.07%|
Peformance Summary to 30 November 2016
Contribution to Return 1 Month to 30 November 2016
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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