Six Park Performance Update: September 2021

Global equities recorded their first down-month for 2021 in September. Both US and European markets were sharply weaker, weighed down by concerns over possible contagion effects from the potential collapse of Chinese property giant Evergrande, US debt ceiling worries and rising inflation.

The Six Park portfolios declined -1.3% to -1.9% for the month. Despite this drop, our rolling 12-month returns remain very strong at 9.4% to 26.1%. Over the past five years, our portfolios have now returned between +3.6% and 10.3% per annum, which equates to total gains of 20% to 63% after fees. These solid returns underscore the benefits of our affordable, well-diversified portfolios. 

Six Park Essential Portfolio Performance – September 2021

_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

Nearly every asset class declined in September, which was the first real down-month of 2021 and followed a period of unusually strong performances up until that point. Hedged international equities fell sharpest during the month (down -2.8%).

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.}

Cash yield eked out a marginal gain of 0.03% to be the month’s best performer (albeit in a “Steven Bradbury-type” result where all other assets generated above-average losses). The sector’s overall returns remain muted, reflecting the ongoing low-interest rate environment.

Emerging markets outperformed all other growth assets in September but still declined -0.8%.  Chinese equities were weak, with investors spooked by the possible collapse of property developer Evergrande (and the potential contagion effects across the broader financial system) and concerns over the impact of power outages and energy rationing on Chinese production and supply chains.  Brazilian stocks also fell as above-target inflation saw its central bank begin to raise interest rates.  

Fixed income declined -1.5%, with expectations of a tightening in global monetary policy along with better-than-expected domestic GDP figures driving local yields higher.  This saw bond prices fall given their inverse relationship with interest rates.

International shares fell -1.6% in September but are still up over +30% for the year. US stocks fared poorly, with the S&P500 down -3% (its first negative month this calendar year) as investors fretted over a range of issues, including the looming government debt ceiling (which could trigger a shut-down of the US government and possible default of its debt obligations) and concerns over rising inflation levels (which could see interest rates rising sooner and higher than expected).  Ongoing global supply constraints and a developing energy crisis also weighed heavily on European equities. Meanwhile, Japanese shares closed higher on stronger than expected corporate results and the election of a new prime minister. Hedged international shares fell -2.8% for the month without the benefit of the AUD’s 1.8% decline against the USD.

After almost a year of consecutive monthly gains, Australian shares lost ground in September and ended the month down -1.9%. Concerns over extended lockdowns in NSW and Victoria, along with falling iron ore prices, saw all but three sectors post losses. Materials, property and consumer staples were the weakest performers.

Infrastructure was down -1.9%. While pipeline and transport stocks (which represent 30% of our chosen ETF) rose over 5% for the month, this was more than offset by steep declines across electricity, utility and REIT stocks (collectively 50% of our ETF) which fell back between -4% and -8% on concerns over slowing global growth.

Global property fell -2.5% in September. Declines were generally widespread, with both US and European REITs pulling back as contagion fears linked to the collapse of Evergrande rippled through real estate markets. The sector still remains the best performing asset class over the year, up over +34% even after September’s pullback. 

Six Park Sustainable Portfolio Performance – September 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.

_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.}

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