Six Park’s Essential portfolios were up from 2.4% to 5.2% in October but market volatility remains high.
This heightened volatility (magnified swings up and down over short time frames) illustrates why we believe it’s very hard to time the market. We believe that patience and “time in the market” typically rewards investors who can ride out bumpy market conditions.
As per S&P Dow Jones Indices, the annualised five-year total return for the ASX 200 index is 7.2% and for the US benchmark S&P 500 is 10.4%.
We understand that it can be emotionally challenging when volatility is high over shorter time frames. However, the annualised five-year total returns illustrate that if possible, investing patience and sticking with one’s financial plan are typically rewarded.
We note that for the year ending October 2022, the total returns for the ASX 200 and US S&P 500 are down 2% and 15%, respectively, while Six Park’s portfolios over that period are down 5% to 7%.
Our diversification across multiple growth and defensive asset classes has smoothed out the impact of global share market volatility, and we believe that when markets eventually do recover, our client portfolios are well positioned to rebound accordingly.
That said, we are not sitting still. Our Investment Advisory Committee recently met and recommended a shift in asset allocations amongst three of our portfolios, increasing exposure to fixed income/bonds and decreasing exposure to cash yield. Read more about the recent Investment Advisory Committee update.
Six Park Essential Portfolio Performance – October 2022
| Period | Conservative | Conservative Balanced | Balanced | Balanced Growth | Aggressive Growth |
| 1 month | 2.4% | 3.2% | 4.1% | 4.7% | 5.2% |
| 3 months | -2.4% | -2.2% | -2.1% | -2.4% | -2.0% |
| 1 year | -5.1% | -5.4% | -6.3% | -7.4% | -7.1% |
| 3 years | -0.1% | 0.9% | 1.9% | 2.3% | 3.3% |
| 5 years | 1.9% | 3.2% | 4.5% | 5.3% | 6.0% |
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.
(4) 1 and 3-year returns are annualised
Asset class performance – October 2022
The asset classes used in Six Park’s portfolios were all up in October, except for our VGE Emerging Markets ETF. Australian and international shares were up 6-8%. Read about Six Park’s selected ETFs.
Over the past year, most major asset classes have had negative returns except for the AAA cash yield ETF. This is symptomatic of the current market environment and negative market cycles tend to occur every four to five years, though the exact timing and duration are almost always highly unpredictable.
History demonstrates that markets do eventually recover.
We stress with clients that for those with a medium to long-term investment horizon, one year is a relatively short time frame (though it can “feel” quite longer during turbulent times).
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 – October 2022
In October our Sustainable portfolios performed generally in line with the Essential portfolios. 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 | 2.3% | 2.9% | 4.1% | 4.8% | 5.5% |
| 3 months | -2.8% | -3.0% | -3.0% | -3.3% | -3.0% |
| 1 year | -6.0% | -7.0% | -8.4% | -9.6% | -9.7% |
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.
Investment Advisory Committee Market Commentary
Our Investment Advisory Committee recently met to assess current market conditions and consider any prudent portfolio construction adjustments. Read the update on our IAC’s deliberations and some adjustments to some of our portfolio allocations that we deem prudent given the changing interest rate environment.