Low-cost ETF Portfolio Updates - February 2019
InvestSMART Diversified Portfolios
Australian’s love their dividends, even more so when Australian companies decide to bump up dividend pay outs by an average of 10% from the same time last year.
The ASX’s grossed up yield is now 5.88%, which saw the ASX beating all major peers in February adding over 5% in the shortest month of the year. This has had a positive effect on all portfolio yields.
| InvestSMART Diversified Income Portfolio | |
| InvestSMART Balanced Portfolio | |
| InvestSMART Core Growth Portfolio | |
| InvestSMART High Growth Portfolio |
InvestSMART International Equities Portfolio
US equities continued their tear-away appreciating in February adding a further 2.95%. In fact, since December 24th 2018 the S&P 500 has added over 18% as at February 28th 2019.
Santa has just kept on giving.
However, US data in February showed that its earning season was below standard. The headline data would suggest the US earnings season was a standout with over 69% of US firms beating consensus expectations on the earnings-per-share (EPS) line. The historical data shows that on average over 72% of US firms beat expectations on the EPS line every reporting season. We would argue this is a miss...
InvestSMART Interest Income Portfolio
Unlike equity markets which have reacted positively to data that should, in theory, send them lower. Fixed income assets have moved more in line with what theory would dictate, which is higher.
Australian and global data throughout January, February and early-March has been weaker than forecasted. This has increased the risk of a decline in both consumer and corporate returns in the coming period...
InvestSMART Property & Infrastructure Portfolio
After a very strong January, property assets slowed in February as reporting seasons both domestically and internationally showed only moderate revenue growth in listed property.
Infrastructure assets fared slightly better than their property peers, as investors looked to ‘bond proxy’ assets to invest in as central banks moved into dovish positions. This also signalled the prospect of ‘pausing’ its rate hike cycle in the case of the US Federal Reverse or actually cutting rates in the case of the Reserve Bank of Australia...
Frequently Asked Questions about this Article…
The ASX's grossed-up yield is currently 5.88%, and it performed exceptionally well in February 2019, adding over 5% in the shortest month of the year, outperforming all major peers.
The positive performance of the ASX in February 2019, with its increased dividend payouts, had a beneficial impact on all InvestSMART Diversified Portfolios, enhancing their yields.
US equities continued their strong performance in February 2019, appreciating by 2.95%. Since December 24th, 2018, the S&P 500 has gained over 18% as of February 28th, 2019.
In February 2019, the US earnings season was below standard, with 69% of firms beating consensus expectations on the earnings-per-share line, compared to the historical average of over 72%.
In early 2019, fixed income assets moved in line with theoretical expectations, increasing in value as Australian and global data showed weaker-than-forecasted performance, raising concerns about future consumer and corporate returns.
In February 2019, property assets experienced a slowdown after a strong January, with moderate revenue growth reported. Infrastructure assets performed slightly better, attracting investors as central banks adopted dovish positions.
Central banks' dovish policies, including the US Federal Reserve's potential rate hike pause and the Reserve Bank of Australia's rate cut considerations, made infrastructure assets more attractive as 'bond proxy' investments.
The weaker-than-expected Australian and global data in early 2019 has increased the risk of a decline in consumer and corporate returns, as economic conditions may not support strong growth.
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