InvestSMART's Performance for the March Quarter
International Equities Portfolio
Property and Infrastructure Portfolio
With the first quarter of the calendar year in the books, we’re pleased to say our diversified core portfolios have experienced a positive quarter. Saying that, over a rolling twelve months to 31 March, all portfolios remain approximately 1% down after a volatile year of inflation and rapid interest rate adjustments.
|
Portfolio |
3-month return |
1-yr |
3-yr pa |
5yr pa |
Since inception pa |
|
InvestSMART Conservative |
2.92% |
-1.38% |
3.12% |
2.96% |
3.30% |
|
InvestSMART Balanced |
3.54% |
-1.10% |
6.11% |
4.67% |
4.76% |
|
InvestSMART Growth |
3.90% |
-1.04% |
8.75% |
6.31% |
6.25% |
|
InvestSMART High Growth |
4.70% |
-0.53% |
11.93% |
7.74% |
7.45% |
|
InvestSMART Ethical Growth |
4.49% |
-2.12% |
N/A |
N/A |
5.18% |
As you know, investing is not a one-year experience, and the price of our future returns is short-term volatility. One of our defences against this is time. With time two things happen. Firstly, with time and perspective, we realise the past wasn’t quite as bad or as good as it may have appeared in the moment. We gain experience and can look back at events with a calmer perspective. It might be with greater empathy on a past relationship or with a few stock market corrections under your belt.
The second principle emphasises that the longer you invest, the higher your likelihood of achieving investment success. BlackRock, the parent company of iShares, conducted an analysis demonstrating the correlation between the duration of investment and the probability of positive returns. This study considered investments made in the S&P 500 at any point in time from 1928 to 2022. The results showed that, with an investment duration of merely one month, the chances of a positive return stood at 62.5%. This probability increased to 75.1% for one-year investments, 88.2% for five-year investments, and a remarkable 94.9% for investments held for over ten years. Importantly, this analysis is based on investments made during any period. The good news is your timeframe is 100% in your own hands.
|
Invested timeframe |
Probability of positive return |
Probability of negative return |
|
One month |
62.5% |
37.5% |
|
One year |
75.1% |
24.9% |
|
Five years |
88.2% |
11.8% |
|
Ten years |
94.9% |
5.1% |
What is in our hands is the stewardship of these portfolios and to continue to invest in line with our mandates. The easiest way to check in on this is to view the long-term numbers of the portfolios and to see if the gap between the portfolio performance and peer group is increasing by the compounding of the fee differential. We compare our portfolios to peers because these are alternative like-for-like options you could choose to invest in. Our low-cost, steady-hand approach is our competitive advantage. You can see if our portfolios remain true to label by monitoring the differential to peers.
Excess to peers per annum
|
Portfolio |
1-yr |
3-yr pa |
5yr pa |
Since inception pa |
|
InvestSMART Conservative |
-1.38% |
0.96% |
1.38% |
1.55% |
|
InvestSMART Balanced |
-0.85% |
1.27% |
1.94% |
1.83% |
|
InvestSMART Growth |
-0.02% |
2.12% |
2.69% |
2.19% |
|
InvestSMART High Growth |
0.54% |
3.36% |
3.47% |
2.52% |
|
InvestSMART Ethical Growth |
-1.10% |
N/A |
N/A |
-1.65% |
Frequently Asked Questions about this Article…
InvestSMART's diversified core portfolios experienced a positive quarter, with returns ranging from 2.92% for the Conservative Portfolio to 4.70% for the High Growth Portfolio.
Over the long term, InvestSMART's portfolios have shown positive annualized returns since inception, with the High Growth Portfolio achieving 7.45% per annum and the Balanced Portfolio achieving 4.76% per annum.
Time is crucial in investing because it increases the likelihood of achieving positive returns. A study by BlackRock showed that the probability of positive returns increases from 62.5% for one-month investments to 94.9% for investments held over ten years.
InvestSMART compares its portfolios to peers to ensure they remain competitive. The performance gap is monitored to see if it increases due to the compounding of the fee differential, which is part of their low-cost, steady-hand approach.
According to BlackRock's analysis, the probability of achieving positive returns increases with the investment duration: 75.1% for one-year, 88.2% for five-year, and 94.9% for ten-year investments.
The InvestSMART Ethical Growth Portfolio had a 4.49% return for the March quarter but is down 2.12% over the past year. Since inception, it has achieved an annualized return of 5.18%.
InvestSMART's High Growth Portfolio has outperformed its peers, with an excess return of 0.54% over the past year and 3.47% per annum over the past five years.
The fee differential is significant because it can lead to a compounding advantage over time, helping InvestSMART's portfolios to potentially outperform peers by maintaining a low-cost, steady-hand approach.
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