InvestSMART Diversified Income Portfolio - September 2018
• The InvestSMART Diversified Income Portfolio produced a return of 1.58% (after fees) during the September Quarter.
• No changes were made to the portfolio during the September quarter
• Estimated yield on the portfolio is currently 2.96%
• Since inception the Diversified Income portfolio has returned 4.63% per. annum (after fees)
Global equities performed strongly in the third quarter of 2018 with the Vanguard MSCI index International Shares ETF (VGS) attributing 1.07% to the fund as US markets experienced their best quarter since the December quarter of 2013. VGS has a 63% exposure to US markets and the outlook remains robust for the world’s largest economy, in addition the falling AUD is providing a additional gains for international holdings.
The iShares Core S&P/ASX 200 (IOZ) attributed only 0.26% over the quarter despite Australia’s positive full-year reporting season as geo-political tensions (US-China trade wars) and the Banking Royal Commission took their toll on the index. We expect the Australian market will underperform global peers again this coming quarter as bank funding increases and commodity prices moderate.
The Vanguard Australia Property Securities Index ETF (VAP) and iShares Core Composite Bond ETF (IAF) added 0.23% and 0.11% respectively. The Australian bond market remained steadfast despite its US counterpart moving quiet rapidly.
Looking to the final quarter fixed interests is likely to remain little changed in the final quarter, the RBA is not forecasted to change the cash rate in 2018 and no change is expected to Australia’s AAA credit rating – this should mean yields and the capital position should remain weather any volatility in the coming quarter.