by David Blumenthal Global share markets surged in August, chalking up their fifth consecutive month of gains. US stocks led the charge, with the S&P500 index reaching a new peak on the back of a better-than-expected reporting season, continued appetite for technology stocks and rising optimism around the progress of potential vaccines and treatments for COVID-19.
The Six Park portfolios gained +1.0% to 3.1% for the month, with our higher risk portfolios benefiting most from the equity market rally. On a rolling 12-month basis, our returns are now -1.7% to -2.3%, well ahead of the ASX200’s return of -4.9% over the same period. On a three-year basis, our portfolios have returned +2.8% to +7.0% per annum, translating to a gross gain of +8.5% to +22.4% after fees.
| Period | Conservative | Conservative Balanced | Balanced | Balanced Growth | Aggressive Growth |
| 1 month | 1.0% | 1.5% | 2.2% | 2.6% | 3.1% |
| 3 months | 1.7% | 2.5% | 3.7% | 4.5% | 5.2% |
| 1 year | -2.3% | -1.9% | -1.7% | -1.8% | -1.9% |
| 3 years | 2.8% | 4.4% | 5.8% | 6.9% | 7.0% |
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) Returns are annualised.
Asset class performance
Almost all asset classes registered gains in August. Hedged international equities were the best performer for a second consecutive month. Fixed income was the weakest, down -0.4%. Read more about Six Park’s selected ETFs.
Hedged international shares (VGAD) soared +7.2% in August. US stocks were particularly strong, with the S&P500 gaining +7% as investors cheered better-than-expected earnings numbers (particularly among tech-related stocks), encouraging news regarding COVID-19 treatments/progress, and confirmation from the Federal Reserve that it would seek to keep interest rates low even if inflation was to spike about its 2% target. Eurozone and Japanese stocks also registered solid gains, buoyed by signs of improvements in industrial and consumer spending. Unhedged international shares (VGS) were slightly weaker as a result of the AUD’s 2% rise against the USD, but still rose +5.1%.
Australian shares (STW) followed global markets upwards, adding +2.5% for the month. Results from the local reporting season were weak (aggregate company profits fell 38% for fiscal 2020, the biggest decline since the 1990s recession) but still broadly ahead of expectations. 16 of the ASX200’s 22 sub-industry sectors advanced, led by the auto components and software services segments (up 21% and 15% respectively).
Emerging markets (VGE) closed +1.4% in August, taking the sector’s quarterly gains to +10.6%. Chinese shares were the main contributor, with the country shrugging off rising tensions with the US and India and reporting stronger than expected Q2 earnings and export figures. Rising commodity and energy prices also helped support Russian and South American markets.
Infrastructure (IFRA) added +1.4% for the month. Transportation services (up +3.3%) and railroads (up (+5.9%) were the leading sub-sectors.
Global property (DJRE) gained +1.4%. European and Asian REITs led the charge, gaining over 4.0% on optimism around the gradual re-opening of several key economies. Gains across US REITs were more measured (+1%) and returns for the month were also held back by the AUD’s appreciation against the USD.
Cash yield (AAA) returns remained muted (+0.1%) reflecting the prevailing low interest rate environment. Strengthening investor sentiment and risk appetite saw local bond yields rise, resulting in a slight decline in our fixed income ETF (IAF) (-0.4%). This was the asset class’s first monthly decline since March.