Six Park Director of Strategy and Analytics Dave Blumenthal by David Blumenthal

January proved to be a highly volatile month for global equity markets, with political turbulence in the US and Europe, a continuing rise in coronavirus infections and a retail investor trading frenzy (amongst certain heavily shorted US stocks) generating a choppy and generally weak period of performance.

The Six Park portfolios were broadly flat for the month, returning -0.3% to +0.2%. Our rolling 12-month returns are now -3.0% to -3.5%, predominantly the result of the drop-off of January 2020 from the calculation window. January 2020 was an especially strong period for equity markets (our portfolios rose +2.4% to +4.2% for the month).  We would anticipate a reversal of this impact as the pandemic-related selloffs of February-March last year drop out of the calculation window in the next few months.

Over the past three years, our portfolios have now returned +2.9% to 6.8% per annum. This equates to total gains of +9.1% to 21.9% over the period (after fees).

Six Park Portfolio Performance – January 2021

Period Conservative Conservative Balanced Balanced Balanced Growth Aggressive Growth
1 month -0.3% -0.3% -0.1% 0.0% 0.2%
3 months 3.0% 4.4% 6.3% 7.6% 8.9%
1 year -3.0% -3.0% -3.0% -3.4% -3.5%
3 years 2.9% 4.4% 5.7% 6.6% 6.8%

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

Emerging markets were the strongest performing asset class in January, gaining +4.0% for the month. All other segments were broadly flat, with the exception of infrastructure, which fell ‑1.7%. Read more about Six Park’s selected ETFs.

A bar chart illustrating Six Park performance in January 2021.

Notes
(1) Results reflect ETF closing prices, not NAV, so may differ from those published by the ETF issuers.

Emerging markets soared in January, advancing as high as +7.0% in the first 3 weeks of the year before a late month sell-off reduced gains to “only” +4.0%. Chinese and Taiwanese stocks (which collectively comprise 59% of our chosen ETF) were the main contributors, rising strongly on the back of advances across technology stocks.  Brazil was the main laggard, with economic releases showing the country’s manufacturing sector decelerated for a third month in a row to its slowest levels since June 2020.

 

International equities were flat for the month but gained +0.4% for the month on an unhedged basis as a result of the AUD’s -0.7% decline against the USD. US markets were highly volatile, buffeted by turbulence associated with the storming of the Capitol building, unusually strong retail demand for shorted stocks (such as Gamestop), political debate over President Biden’s stimulus package and concerns around coronavirus vaccine efficacy and rollout pace.  European stocks were also weaker, with lockdown restrictions and political turmoil in Italy (leading to the resignation of that country’s prime minister) weighing on sentiment.

 

Global property eked out a marginal gain in January, with falls across US and European real estate stocks offset by the AUD’s depreciation.

 

Returns on our cash yield ETF were positive but muted (+0.04%) for the month, reflecting the prevailing low-interest rate environment.

 

Australian shares closed down slightly (-0.2%) in January. Six out of the country’s industry sub-sectors posted gains for the month, led by consumer discretionary and telecommunications stocks (up +4.7% and +2.7% respectively). Property trusts and industrial stocks were weakest, falling -4.1% and -3% over the month.

 

Fixed income fell -0.5% in January. Expectations of a lift in global economic growth along and continued supportive monetary policy by the RBA helped boost bond yields and reduce prices.

 

Infrastructure declined -1.7% during the month. Although pipeline and fixed line telecommunication assets (collectively 10% of our chosen ETF) were up more than 5% for the month, steep falls of -7% across transport stocks (23% of the fund) and a -1% decline in electricity assets (33% of the fund) dragged the overall sector down.

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Published February 11, 2021

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