Global equities fell in February, with almost all markets spooked by economic, financial, and humanitarian implications of Russia’s invasion of Ukraine. The likelihood of higher interest rates and inflation also remain headwinds for global equities.
The ASX200 bucked the trend, eventually closing up 1.9% for the month after a strong final week of trading, particularly for energy and consumer staple stocks.
The Six Park portfolios fell -1.3% to -2.6% over the month, but rolling 12-month portfolio returns remain robust, up +4.5% to +11.2% after fees.
Annualised 5-year returns have edged higher, ranging from +4.4% to 10.4%. Six Park’s portfolios continue to outperform more than 88% of comparable multi-asset class managed funds in the Morningstar database over the past five years.
While the past two years have been unnerving for investors with the onset of the pandemic and more recently the situation in Ukraine, we’re pleased that our portfolios have produced solid returns in volatile markets over time.
Relatively new investors will have seen their investment values swing materially over short periods of time, which is why we stress the importance of diversification, patience, and periodic portfolio rebalancing (versus trying to time the market).
Six Park Essential Portfolio Performance – February 2022
| Period | Conservative | Conservative Balanced | Balanced | Balanced Growth | Aggressive Growth |
| 1 month | -1.3% | -1.5% | -2.0% | -2.4% | -2.6% |
| 3 months | -2.3% | -2.9% | -3.8% | -4.5% | -4.9% |
| 1 year | 4.5% | 6.2% | 8.2% | 9.7% | 11.2% |
| 3 years | 2.8% | 4.4% | 6.2% | 7.4% | 8.3% |
| 5 years | 3.2% | 4.9% | 6.7% | 7.9% | 8.6% |
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
While most asset classes were down in February, Australian shares added 1.9% after a bumpy start.
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.
Global growth asset classes (equities, emerging markets and infrastructure) were all down in February. The strengthening of the AUD:USD exchange rate reduced the relative underperformance of the hedged international shares ETF. Emerging markets tend to underperform in a rising interest rate environment, which was the case in February as well. As noted above, the Australian share market proved more resilient, up 1.9% in February.
Fixed income (bonds) continued its relatively poor performance with the onset of rising interest rates. When interest rates rise, the price of bonds falls but the yield on bonds increases over time. So the price performance will underperform but the eventual benefit for investors is realised through higher yielding dividends. Importantly, despite the underwhelming recent performance of fixed income, we still believe that fixed income plays a very important role in portfolio construction, given its inherently lower level of volatility and asset class diversification benefits.
Lastly, this update highlights the current volatile environment and the difficulty in trying to time the markets. Our global listed property ETF was down 5% in February but is up 22% over the past year. This is just one example of how unpredictable markets can be, and why it is important to remain patient with your investment strategy.
Six Park Sustainable Portfolio Performance – February 2022
Our Sustainable portfolios lagged the performance of our Essential portfolios in February. This was largely due to their relatively higher exposure to tech companies/growth stocks, which underperformed over the month.
In previous updates, our new Sustainable portfolios had (at that time) outperformed our Essential portfolios due to the slightly different underlying holdings of the ETFs. It’s important to note that our Sustainable portfolios are designed to perform in line with our Essential portfolios but, over time, there will be periods of slight outperformance and underperformance.
| Period | Conservative | Conservative Balanced | Balanced | Balanced Growth | Aggressive Growth |
| 1 month | -1.5% | -1.9% | -2.6% | -3.2% | -3.4% |
| 3 months | -2.9% | -3.8% | -5,5% | -6.5% | -7.3% |
| 1 year | 3.9% | 5.2% | 7.5% | 9.2% | 10.9% |
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.