by David Blumenthal Global equities rebounded strongly in October, supported by better-than-expected US corporate earnings and an easing of fears surrounding China’s property sector. Meanwhile, a surge in the AUD (driven in part by rising commodity prices) created a major headwind for unhedged holdings and rising inflation fears also weighed heavily on bond markets.
The Six Park portfolios fell back slightly over the month (-0.5% to -0.1%) but have still generated strong returns of +9.3% to +25.7% over the past 12 months. Returns over 3 and 5 years have also edged higher, with the latter now standing at +3.8% to 10.7% per annum. This equates to gross gains of 21% to 66% after fees, long-term returns which highlight the benefits of our focus on low-cost, diversified investment strategies.
Six Park Essential Portfolio Performance – October 2021
| Period | Conservative | Conservative Balanced | Balanced | Balanced Growth | Aggressive Growth |
| 1 month | -0.5% | -0.3% | -0.4% | -0.4% | -0.1% |
| 3 months | -0.8% | -0.4% | -0.2% | 0.1% | 0.7% |
| 1 year | 9.3% | 13.3% | 18.3% | 22.0% | 25.7% |
| 3 years | 4.2% | 6.3% | 8.8% | 10.5% | 11.5% |
| 5 years | 3.8% | 5.9% | 8.1% | 9.7% | 10.7% |
Notes:
(1) Past performance is not indicative of future performance.
(2) All figures are illustrative in nature based on notional $50,000 portfolios which are assumed to have been fully invested at the start of the relevant period. Your actual investment performance may vary depending on factors such as the timing of your investment with us.
(3) All figures are pre-tax but net of Six Park’s and applicable ETF fees. The results are based on closing prices for each ETF, not NAV. They assume dividend reinvestment (at month end) but do not include dividend imputation, cash holdings or annual rebalances.
(4) 1 and 3-year returns are annualised
Asset class performance
Asset class performances were mixed in October, with global shares (hedged) and infrastructure posting strong gains (+3.3% and +2.4% respectively) while emerging markets and fixed income fell sharply (both down -3.3%).
Read more about Six Park’s selected ETFs.
Notes
(1) Results reflect ETF closing prices, not NAV, so may differ from those published by the ETF issuers.
(2) Results reflect asset class performance for ETFs used in Essential portfolios. Performance for sustainable ETFs is broadly in line with the results shown.
Hedged international shares rose strongly in October (+3.3%). US stocks led the way, with the S&P500 surging +6.9% on the back of strong corporate earnings releases (more than 80% of reporting companies exceeding market expectations) and progress on lifting the US government’s debt ceiling. European equities also registered solid gains, buoyed by positive earnings results and falling gas prices. Despite these advances, unhedged international shares fell -0.9% as a result of the +4.8% appreciation in the AUD which gained on the back of rising commodity prices and expectations that the RBA would need to lift interest rates sooner than originally expected.
Infrastructure lifted +2.4% for the month. Railroads (which represent 8% of our chosen ETF) were a key contributor, with the segment soaring +11% for the month as operators benefited from rebounding demand and rising prices. Pipelines and transportation services and pipelines (collectively 33% of our ETF) were also strong, advancing +6% and +3% respectively.
Global property recovered +0.9% in October. US real estate stocks were particularly strong, rising +8% on encouraging corporate earnings and an easing of concerns around the potential collapses of Chinese developer Evergrande. Non-US REITs registered more modest gains(+1.9%) and the sector’s overall returns were dampened by the AUD’s near 5% gain against the USD (which reduced the value of overseas holdings in local currency terms).
Australian shares edged lower for the month (-0.3%). While IT and healthcare stocks closed higher (up 2.1% and 1.0% respectively), almost all other segments were down on concerns that higher than expected inflationary figures would bring forward interest rate rises.
Emerging markets declined -3.2%. While Chinese equities were modestly positive (spurred by a real estate rally), this was offset by steep falls across Brazil (on concerns over its deteriorating fiscal position) and India (driven by weak tech stock performance and inflation worries). The headwinds from the AUD’s appreciation were also a further drag on performance this month.
Fixed income fell -3.3%, with expectations of a tightening in global monetary policy driving bond yields higher (and ergo prices lower). Meanwhile, cash yield eked out a very marginal gain (0.004%) reflecting the ongoing low-interest bank rate environment.
Six Park Sustainable Portfolio Performance – October 2021
Since launching, our Sustainable portfolios have performed closely in line with their Essential counterparts, as we would generally expect.
We’re pleased that our clients’ sustainable portfolios are delivering what we hope: a similar risk/reward portfolio performance outcome as the aligned Essential portfolios, with the benefit of having a meaningful sustainable tilt embedded in the portfolio construction.
| Period | Conservative | Conservative Balanced | Balanced | Balanced Growth | Aggressive Growth |
| 1 month | -0.4% | -0.1% | 0.1% | 0.3% | 0.7% |
| 3 months | -1.0% | -0.6% | -0.3% | -0.1% | 0.5% |
Notes:
(1) Past performance is not indicative of future performance.
(2) All figures are illustrative in nature based on notional $50,000 portfolios which are assumed to have been fully invested at the start of the relevant period. Your actual investment performance may vary depending on factors such as the timing of your investment with us.
(3) All figures are pre-tax but net of Six Park’s and applicable ETF fees. The results are based on closing prices for each ETF, not NAV. They assume dividend reinvestment (at month end) but do not include dividend imputation, cash holdings or annual rebalances.