Diversified Portfolios - InvestSMART Fixed Income - 31 July 2016
COMMENTARY
PORTFOLIO COMMENTARY
The InvestSMART Fixed Income Portfolio produced a return of 0.7% over the month ofJuly which was broadly in line with benchmark over the month and ahead of returns offered on cash deposits.
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 achieve a higher return with less volatility.
Holdings

Estimated yield

Growth of $10,000
Income Reinvested

PERFORMANCE SUMMARY TO 31 JULY 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 22 December 2015.
PERFORMANCE TO 31 JULY 2016 | 1 MONTH | 3 MONTHS | 6 MONTHS | SI* (P.A.) |
---|---|---|---|---|
InvestSMART Fixed Income Portfolio | 0.69% | 2.14% | 3.33% | 3.57% |
Bloomberg AusBond Composite 0 Yr Index | 0.74% | 3.35% | 4.47% | 5.50% |
Excess to Benchmark | -0.04% | -1.22% | -1.14% | -1.93% |
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.
Frequently Asked Questions about this Article…
The InvestSMART Fixed Income Portfolio is an investment strategy that aims to provide returns by investing in fixed income securities. It produced a return of 0.7% in July, which was in line with its benchmark and higher than cash deposit returns.
To manage risk, the InvestSMART Fixed Income Portfolio invests around half of its assets in cash and a managed fund focused on floating rate corporate bonds. This approach helps reduce volatility and aims for higher returns over a three-year period.
The yield to maturity for the InvestSMART Fixed Income Portfolio is around 2%. However, this yield is considered insufficient to compensate for the risk of volatility in fixed income bond markets.
As of July 31, 2016, the InvestSMART Fixed Income Portfolio underperformed its benchmark, the Bloomberg AusBond Composite 0 Yr Index, by 0.04% over one month, 1.22% over three months, 1.14% over six months, and 1.93% since inception.
No, past performance is not a reliable indicator of future performance. The portfolio's returns can fluctuate due to various factors, and investors should consider their own financial situation and objectives before investing.
Investors should consider their individual objectives, financial situation, and needs. It is recommended to seek professional advice and review the Product Disclosure Statement (PDS), Approved Product List, and Financial Services Guide (FSG) before making investment decisions.
Investing in the InvestSMART Fixed Income Portfolio involves risks, including the potential for capital growth and income, but also the risk that the total return may be less than the amount invested. Market performance, liquidity, and other factors can affect returns.
The financial commentary for the InvestSMART Fixed Income Portfolio is provided by InvestSense Pty Ltd, an authorized representative of Sentry Asset Management Pty Ltd.