by David Blumenthal August was another strong month for the Six Park portfolios, with US sharemarket gains and a decline in the AUD helping to underpin overall returns of +0.8% and +2.2%. On a rolling 12-month basis, our portfolios are now up +4.6% to +14.6%, with our higher growth portfolios benefiting most from the ongoing strength of global equities.
Six Park Portfolio Performance – August 2018
| PERIOD | CONSERVATIVE | CONSERVATIVE BALANCED | BALANCED | BALANCED GROWTH | AGGRESSIVE GROWTH |
|---|---|---|---|---|---|
| 1 mth | 0.8% | 1.3% | 1.7% | 2.1% | 2.2% |
| 3 mths | 2.0% | 3.0% | 4.1% | 5.0% | 5.7% |
| 1 year | 4.6% | 7.8% | 11.2% | 13.7% | 14.6% |
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.
ASSET CLASS PERFORMANCE
Global property and international shares were the standout asset classes in August, rising +4.7% and +4.4% respectively. Emerging markets were the weakest, declining -1.5% amid ongoing China/US trade tensions and Turkish economic woes.
After a weak July result, global property rebounded strongly in August, rising +4.7% for the month. US real estate stocks were the main driver, gaining +3% on the back of strong earnings results and favourable economic conditions. These advances were boosted by the 2.3% fall in the AUD, which increased the value of overseas assets in local currency terms.
Global equities added +4.4% for the month. While European and Japanese markets declined (driven by escalating trade tensions, concerns over exposures to Turkish debt and ongoing Brexit negotiation worries), this was more than offset by outperformance from US shares (up +3.3%) and the falling AUD. US shares were lifted by rallies in technology stocks (with Apple becoming the first company to reach a market value in excess of US$1 trillion), accelerating economic growth figures (Q2 GDP stats showed that the US economy grew at its fastest pace in almost 4 years) and strong corporate earnings. During the month, the S&P500 index reached new record highs (breaching 2,900 points for the first time) and officially marked its longest ever “bull market” run (more than 3,453 days without falling more than 20%).
Australian shares lagged their overseas counterparts, but still advanced +1.5% over the month. While results from the corporate reporting season were generally positive (CBA research noting that 93% of companies produced a profit, above the 87% long-term average), the local market was dragged down by declines across material stocks (down -5.3%) and the fallout from the Liberal Party’s leadership crisis.
Fixed income and cash yields were positive but subdued in August, reflecting the prevailing low interest rate environment and the RBA’s decision to keep rates on hold for a 24th consecutive month.
Infrastructure stocks posted a marginally negative return (-0.2%), with gains across North American gas and utility stocks offset by weakness among various Eurozone infrastructure companies.
Emerging markets were down -1.5% during August. Chinese equities fell against a backdrop of escalating US trade tensions and disappointing economic data (in particular investment levels in fixed assets). A growing economic crisis in Turkey (which is struggling with rising debt levels, a sharp currency decline and an escalating diplomatic feud with the US) also triggered concerns of potential contagion across other emerging market nations.
Six Park publishes its performance returns monthly, including by portfolio and by asset class. You can view past performance reports by visiting the “Insights” section and selecting “Performance updates”.