Global investment markets remained volatile in May 2023, with Australian shares dropping almost 3%. Ongoing uncertainty related to the US debt ceiling outcome continued to dominate headlines, though international shares actually rose in May, driven in part by a rally in the technology sector.
For the month of May 2023, Six Park’s diversified Essential portfolios were down from 0.9% to 1.0%. The US S&P 500 was up 0.25% in May 2023, and the ASX 200 index was down almost 3%.
Six Park Essential Portfolio Performance – May 2023
| Period | Conservative | Conservative Balanced | Balanced | Balanced Growth | Aggressive Growth |
| 1 month | -1.0% | -1.0% | -1.0% | -1.0% | -0.9% |
| 3 months | 1.1% | 1.3% | 1.7% | 1.7% | 1.9% |
| 1 year | 0.1% | 0.6% | 1.3% | 1.3% | 1.9% |
| 3 years | 2.1% | 3.5% | 5.5% | 6.5% | 8.1% |
| 5 years | 2.1% | 3.5% | 4.9% | 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 – May 2023
International shares rose 2% in May, but concerns around the economic outlook in Australia weighed on Australian shares.
Global listed property and infrastructure also lagged, as investors remain cautious about the near-term outlook for infrastructure investment and commercial property performance.
We view gyrations with these asset classes to be influenced more by short-term, cyclical factors rather than long-term performance indicators. One of the powerful aspects of periodic portfolio rebalancing over time is the automation of selling small portions of asset classes that have relatively outperformed to buy small portions of asset classes when their prices are relatively depressed.
So in very simple terms, over the last year, international shares have performed well whereas global property and infrastructure have underperformed. Rebalancing would see a ‘typical’ multi-asset class portfolio (like those provided by Six Park) sell a small amount of international shares to buy a small amount of property/infrastructure. We believe that this is a very sensible process (selling at relative high points and buying at relative low points) to apply periodically to investment portfolios to optimise returns.
Rebalancing is one of the features of the Six Park service.
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 – May 2023
In May, 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. 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 | -0.7% | -0.5% | -0.2% | 0.0% | 0.3% |
| 3 months | 1.6% | 2.1% | 3.2% | 3.6% | 4.1% |
| 1 year | 0.4% | 1.1% | 2.5% | 3.0% | 4.0% |
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.
Final Comments
We are at an interesting point in time when the US share market (or at least the key S&P 500 index) has staged a largely unexpected rally since September 2022. For all the ‘experts’ that suggest that we are now in a ‘bull’ market, there are as many experts who are adamant that this is a false rally and trouble is ahead. What is the right answer? Nobody actually knows. Nobody ever really knows with certainty.
If we’ve witnessed anything during the past few years, it’s that markets, and the factors that drive them, are very unpredictable over the short term. What we do know with a measure of clarity is how markets typically perform over longer periods of time. That data is the basis of the investment management philosophy that Six Park deploys for clients.
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.