by David Blumenthal July was another strong month for investors, with a better-than-expected earnings season in the US and the continued economic recovery in Europe overshadowing concerns from the surge in delta strain infections and a sharp, regulatory-driven sell-off of Chinese stocks.
Six Park’s Essential portfolios gained +1.5% to 1.7% for the month. Our rolling 12-month returns have risen again to +9.7% to 25.6%, further rewarding those investors who stayed the course with their investment strategies following the sharp market oscillations in the first half of 2020.
Over the past 5 years, our portfolios have now returned between +3.6% and 9.8% per annum. This equates to gains of 19.6% to 59.9% over the period (after fees). These solid returns underscore the advantages of our focus on low-cost, diversified investing.
Six Park Essential Portfolio Performance – July 2021
| Period | Conservative | Conservative Balanced | Balanced | Balanced Growth | Aggressive Growth |
| 1 month | 1.5% | 1.6% | 1.6% | 1.7% | 1.6% |
| 3 months | 3.2% | 4.0% | 5.1% | 5.8% | 6.3% |
| 1 year | 9.7% | 13.4% | 18.6% | 22.2% | 25.6% |
| 3 years | 4.3% | 6.0% | 8.0% | 9.3% | 10.0% |
| 5 years | 3.6% | 5.4% | 7.5% | 8.9% | 9.8% |
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
Global property was the standout asset class in July (up +5.4%). Almost all other asset classes posted positive returns with the exception of emerging markets, which fell -5%.
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 property climbed +5.4% in July, buoyed by an especially strong reporting season for US real estate stocks (which continue to benefit from a reopening of the local economy) and tailwinds from a strong US dollar (+1.8%). Global property is now the best performing asset class over the past 12 months (+33.9%), a marked reversal from one year ago when it was the weakest sector (down -21% on a rolling 12-month basis). This highlights the difficulties of predicting investment returns based on historical trends.
A surge in delta strain infections did little to temper enthusiasm for international shares, which gained +3.3% for the month. US stocks benefited from a better-than-expected earnings season (Factset data showed average profits almost 20% ahead of analyst expectation) while European stocks advanced on solid economic releases (eurozone GDP up 2.2% in Q2 after a -0.1% decline in Q1). Hedged international equities rose a more modest +1.3% for the month without the benefit of the AUD’s depreciation.
Infrastructure stocks gained +2.2% in July. Electricity and multi-utility stocks (which represent 41% of our chosen ETF) registered the strongest gains (over +5% for the month) while transport stocks (30% of the portfolio) were also up 3.2%.
Fixed income added 1.8% month, with local bonds continuing to benefit from signals from the RBA that it remains committed to maintaining highly accommodative monetary conditions for some time yet. Returns on our cash yield ETF were marginally positive (+0.01%) reflecting the ongoing low-interest rate environment.
Australian shares posted a 10th consecutive month of positive returns, rising +1.2%. Despite rising concerns over lockdowns in NSW and elsewhere, strong demand for commodities along and expectations of a bumper earnings season saw the local market touch new record highs during the month.
Emerging markets fell sharply in July (down -5%), primarily on news of changes to the regulatory framework for Chinese technology and education stocks. This tighter regulatory scrutiny went further than analysts had anticipated and triggered a -13.4% sell-off of Chinese stocks and reverberations across other emerging markets. India was one of the only countries to buck the trend, registering modest gains on improving covid-19 caseloads.
Six Park Sustainable Portfolio Performance – July 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 | 1.4% | 1.6% | 2.0% | 2.3% | 2.4% |
| 3 months | 3.3% | 4.1% | 5.6% | 6.7% | 7.4% |
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.