Global investment markets continued an upward climb in June 2023, with sentiment growing that a ‘soft economic landing’ may be more likely than presumed a month earlier.
In the US, inflation seems to be reducing without material impact on employment levels, but whether this continues to play out over the coming months remains to be seen. There is certainly a more positive tone in investor sentiment, but as we’ve observed many times in the past five years, such sentiment (and the data that drives it) can reverse quickly and unexpectedly. That said, we continue to feel that it is a good time to remain invested and well diversified across asset classes.
It’s worth noting that in June 2022, markets fell 4%-7% across most growth asset classes, and then rallied 5%-9% in July 2022. We live in volatile times, so patience is critical in one’s investment approach.
For the month of June 2023, Six Park’s diversified Essential portfolios were up from 0.2% to 1.9%. The US S&P 500 was up 6.5% in June 2023, and the ASX 200 index was up 1.8%.
Six Park Essential Portfolio Performance – June 2023
| Period | Conservative | Conservative Balanced | Balanced | Balanced Growth | Aggressive Growth |
| 1 month | 0.2% | 0.6% | 1.0% | 1.5% | 1.9% |
| 3 months | 0.4% | 1.1% | 1.8% | 2.5% | 3.3% |
| 1 year | 3.7% | 5.6% | 8.0% | 9.2% | 10.9% |
| 3 years | 2.2% | 3.9% | 5.9% | 7.1% | 8.7% |
| 5 years | 2.0% | 3.3% | 4.8% | 5.6% | 6.4% |
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.
(4) 3 and 5-year returns are annualised.
Asset Class Performance – June 2023
All of Six Park’s growth asset classes were up in June 2023, led by both hedged and unhedged global shares. After several months of underperformance, the global listed infrastructure and property asset classes rebounded in June, supported by the improvement in the global economic outlook.
Read 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.
Six Park Sustainable Portfolio Performance – June 2023
In June, our Sustainable portfolios outperformed our Essential portfolios. This outperformance is primarily driven by the strong performance of the technology sector, as the Sustainable portfolios have a slightly higher allocation to technology companies.
To bring this dynamic to life, the US NASDAQ index (with a higher technology weighting) was up 26% for the one-year period through June 2023, while the US S&P 500 was up 17.6% for the same period. Both strong numbers, but the technology weighting in the NASDAQ had a material impact. This, of course, can work both ways when the technology sector falls out of favour.
Note that while our Sustainable portfolios are designed to perform in line with our Essential portfolios, over time, there may be periods of relative outperformance and underperformance.
| Period | Conservative | Conservative Balanced | Balanced | Balanced Growth | Aggressive Growth |
| 1 month | 0.1% | 0.4% | 0.7% | 1.1% | 1.5% |
| 3 months | 0.6% | 1.4% | 2.7% | 3.7% | 4.8% |
| 1 year | 3.8% | 5.8% | 9.1% | 10.8% | 13.1% |
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.
Final Comments
Whether the ‘soft landing’ scenario plays out near-term will be the main focus of financial markets. ‘Soft landing’ is a term generally used to describe (in this case) an environment in which there has been rapidly increasing interest rates to tame high inflation, but not a materially negative or destabilising impact on economic growth or employment conditions. In other words, the slowdowns caused by rising interest rates do not cause as much economic ‘pain’ as some might otherwise fear. We will monitor this situation closely, but remind clients that these are generally short-term dynamics, and a prudent long-term investment strategy, for most people, does not get unhinged by short-term gyrations.
The pillars of our investment philosophy are prudent diversification, low costs and patience (all backed by data and a wealth of experience). This is in fact a proven strategy over time, so we continue to advise clients to try to avoid paying too much attention to short term ‘noise’ and let our Investment Advisory Committee assess when more fundamental issues are cause to make adjustments to our investment settings.