MultiSeries 70

 

Features

Information

APIR codeMMF1538AU
Minimum suggested Investment time frame10+ years
Growth/defensiveGrowth 76% / Defensive 24%
FE fundinfo sectorMixed Asset - Growth
Income distribution frequencyQuarterly
Total fees and costs as at 9 February 20220.92% pa
Fund size$2.95m
Inception date15 November 2010

Investment minimums

Please refer to PDS 

Pricing

Price date30/09/2022
Entry$1.2654
Exit$1.2669

Standard risk measure

1 2 3 4 5 6 7
Standard Risk Measure

A Standard Risk Measure score of 5 equates to a Risk Label of 'Medium to High' and an estimated number of negative annual returns over any 20 year period of 3 to less than 4. This is a measure of expected frequency (not magnitude) of capital losses, calculated in accordance with ASFA/FSC guidelines.

Investment objective

This fund aims to achieve returns (before fees, charges and taxes) that on average exceed inflation by at least 5.0% p.a., over periods of ten years or more.

Investment strategy

The fund invests in a diversified portfolio of Australian and international assets through a mix of managers, with a bias towards growth assets. The fund is actively managed in accordance with the OptiMix Multi-manager investment process.

Investor profile

The Fund is intended to be suitable for investors seeking a well-diversified portfolio.

Research house ratings

Rating

LonsecInvestment Grade

Meet the manager(s)

NameIOOF Investment Team
BiographyOur impressive investment capabilities are driven by our investment team and structure. Each asset class has a dedicated portfolio manager who enjoys strong support from a host of support staff including analysts and investment specialists. Furthermore, the team benefits from the strong support of our additional research capabilities, namely through our asset consultant.
PhotoIOOF Investment Team

Cumulative performance

ResetPerformance line chart
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3 months6 monthsYear to date1 year3 years pa5 years pa
Fund-1.77%-7.51%-10.01%-7.25%1.84%4.11%
FE Sector-1.33%-9.08%-11.79%-9.19%1.92%4.35%

Calendar Performance

Performance Bar chart
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31/12/202131/12/202031/12/201931/12/201831/12/2017
Fund14.24%0.94%16.60%-3.27%10.26%
FE Sector14.50%2.87%16.82%-2.64%9.82%

Performance is net of management costs and expenses. Performance is based on exit price to exit price for the period and assumes that all distributions are reinvested. Management costs and other expenses are accounted for in the exit price. Past performance is not a reliable indicator of future performance.


The performance data has been sourced by FE fundinfo.


Asset allocation as at 30/09/2022

Breakdown pie chart
Australian shares23.90%
International shares28.71%
Australian fixed interest9.70%
International fixed interest8.64%
Australian property6.74%
International property1.85%
Alternative - growth6.60%
Alternative - defensive8.98%
Cash and short-term securities4.87%

Asset allocation range


Asset class Asset range
Australian shares 10-35%
International shares 20-40%
Diversified fixed interest 5-30%
Property 0-20%
Alternative growth 0-20%
Alternative defensive 0-20%
Cash and short-term securities 0-15%

Actual versus target asset allocation as at 30/09/2022

Manager diversification within each asset class as at 30/09/2022

Breakdown pie chart

Top holdings - Australian shares as at 30/09/2022

BHP Group Ltd1.80%
CSL Limited1.35%
Commonwealth Bank of Australia1.21%
National Australia Bank Limited1.15%
Transurban Group Ltd.0.86%
Macquarie Group, Ltd.0.70%
Woodside Energy Group Ltd0.66%
Westpac Banking Corporation0.65%
Australia and New Zealand Banking Group Limited0.53%
Aristocrat Leisure Limited0.49%

Top holdings - International shares as at 30/09/2022

Microsoft Corporation1.06%
Apple Inc.0.68%
Amazon.com, Inc.0.66%
UnitedHealth Group Incorporated0.56%
Visa Inc. Class A0.41%
Alphabet Inc. Class A0.37%
Alphabet Inc. Class C0.31%
MSCI Emrg Markets Mini (IFUS) Dec 220.31%
Mastercard Incorporated Class A0.27%
Eli Lilly and Company0.27%

Market and portfolio review

Invesco Global Targeted Return Fund was terminated from the Alternatives portfolio due to Invesco deciding to change the underlying strategy of the Fund.


Contributors to performance

Both Alternative Defensive and Growth portfolios produced positive returns in a challenging environment.

The diversified fixed interest portfolio outperformed in a rising yield environment, due to its short duration positioning.

Detractors from performance

An underweight allocation to Australian equities detracted value.

Future investment strategy

Global Economy

The US Federal Reserve (Fed) continues to raise rates and the hawkish rhetoric remained unchanged, indicating that the Fed won’t pivot on their restrictive stance anytime soon. Interestingly, post the end of the quarter, the RBA only raised rates by 0.25% in October, which came as a mild surprise to the market.

Inflation remains elevated, although we are starting to see some signs that inflation may be on the way down. Having said that, Europe, including the U.K. still seems to be struggling with inflation, in particular energy prices, so inflation remains at or near record highs. Spurred by Geopolitical tension caused by the Russian-Ukrainian war which is showing no signs of slowing with an EU high representative conceding European prosperity had been reliant on cheap energy from Russia which is no longer available.

Unemployment rates remain very low across the developed world and are inconsistent with a recession scenario at the moment. The US unemployment rate fell to 3.5% in September 2022, matching July's 29-month low and remaining below market expectations of 3.7%. This is a clear sign that overall labour market conditions in the U.S. remain tight.

Markets

The S&P 500 lost over 5%, while the Australian S&P 200 lost a relatively small 1.4% for the quarter. Low volatility stocks were the worst performers for the quarter, while Growth and Equal-weight were the best performing styles. This was consistent across both the Australian and global markets. From an Australian GICS sector perspective, Healthcare was the best performing sector, followed closely by Information Technology and Energy. The worst performing sectors were Utilities and Property Trusts, which was no surprise given they are some of the most interest rate sensitive sectors.

Fixed income markets struggled during the September quarter. While Australian Fixed Interest produced positive returns for investors in July, this was more than offset by August and September’s poor performance. Bond yields continued to rise, driven by both inflation and interest rate expectations.

Global equity markets

Over the quarter weakness in global equity markets was widespread largely influenced by US risk on/risk off sentiment. Many of the major bourses started the quarter strongly with expectations inflation had peaked, before pivoting and reversing all gains after the Fed re-affirmed its restrictive stance in August, especially if economic data suggested it remained prudent to do so. Higher-than-expected US August Core CPI on 13 September further removed any expectation that the Fed could begin to ease their rate increases, instead expectations for interest rates moved higher, the expected peak Fed Funds rate increased from 4 to 4.5% early 2023 and the expected timeframe the rate would remain high lengthened as it became clearer that the Fed would not “prematurely” ease and allow inflation to get away from them.

Global Equities had one shining factor, the strong US$, which helped mitigate some of the global equity market declines from an Australian investor perspective.

Australian equity markets

The Australian market experienced similar volatility to its global counterparts. The S&P/ASX 200 Index was marginally down 0.2% for the quarter reversing early quarter gains. Small caps experienced a similar early quarter rally, gaining as much as 15% before closing -0.47% lower.

Australian equities held up a little better than the US markets in the recent pull back (in local currency terms), but the Australian market also didn’t rally as strongly from the mid-June lows either.

Australian bond market

Australian Fixed Interest funds in general had a poor quarter, with the main Australian Fixed Interest index, the Bloomberg AusBond Composite 0+ Years Index losing 0.6%. Australian yields, rose across the curve, with the short end factoring in expected interest rate rises and increasing by around 0.7%, while the long end of the curve rose by a more sedate 0.23%. So, while Australian Fixed Interest had a good month in July, this was more than offset by August and September’s poor performance.

Australian corporate bonds were relatively flat over the September quarter, with the Bloomberg AusBond Credit 0+ Years Index losing just 0.1%. Note this index has approximately 3.5 years of duration, so the rising yields had a greater impact on performance during the quarter than the coupon income and movements in credit spreads did.

US bond market

Over the quarter, Government bond yields rose at a dramatic rate, meaning bond prices fell, as inflation remained elevated, and the Fed reaffirmed its commitment to reining in inflation leading to the yield curve rising significantly across the curve. This resulted in negative returns for the September quarter for fixed interest investors. Note the 2-year / 10-year part of the curve is inverted (2 year rates are higher than 10 year rates). This is usually considered to be a leading indicator for a pending recession.

Over the quarter, high yield credit spreads tightened by 6 basis points. Global High Yield bonds as measured by the Bloomberg Barclays Global High Yield Total Return Index Hedged AUD lost 1.9%. While the contraction in credit spreads added to performance, both duration and currency hedging more than offset any gains. Fundamentals in the high yield market still look reasonable, however, given most U.S. economic indicators show the U.S. is in an economic downturn, valuations are less attractive. As previously stated, the quality of the high yield market has improved in recent years and the low interest rate environment led many issuers to extend their debt maturity profile, which has strengthened a significant number of high yield companies.

Currencies

The US dollar index (DXY) ended September at 112 the highest monthly close of the index since April 2002. To put the strength of the US dollar relative it its trading partners into context, the last time the DXY was at these levels, it peaked at 120.04 on 28 January 2002, which was the highest level since February 1986.

The USD continues to benefit on the increasing “carry” of higher interest rates and having a “healthier” economy than developed market peers. The USD also benefits from its reserve currency status and the current risk off as the UK and European countries struggle with inflation and economic weakness.

The AUD has been weak against the strong US, but the relative health of our economy and the RBAs proactive increase rate stance has provided solid foundation for our currency despite price weakness in our key exports Coal and iron.

Commodities

Commodity prices experienced a poor quarter as stubborn inflation figures and higher interest rates weigh on current and expected global growth. The war in Ukraine and the interruptions to gas supply to Europe helped lift Natural Gas prices and to a lesser degree Thermal Coal.

Oil prices have come under substantial pressure over the quarter despite OPEC Plus reducing production by a nominal 100k barrels per day (bpd) in August. In its August Market Report, OPEC estimated that global crude oil demand would fall by around 300k bpd in both 2022 and 2023. The International Energy Agency (IEA) also noted that sudden demand spikes borne out of easing pandemic restrictions are set to drop in Q4 2022.

On Wednesday 5 October, Saudi Arabia and Russia, acting leaders of the OPEC Plus energy cartel, agreed to a cut of 2m bpd (2% of global production) despite US and European leaders urging for more oil to ease prices and punish Moscow for its aggression in Ukraine.

This website contains general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this information, you should assess your own circumstances or seek advice from a financial adviser. You should obtain and consider a copy of the relevant Product Disclosure Statement (PDS) or offer document available from us or your financial adviser, before you acquire a financial product.

OneAnswer Frontier Investment Portfolio is issued by OnePath Funds Management Limited ABN 21 003 002 800 AFSL 238342.

The information provided in this table is a brief outline of the major features of OneAnswer Frontier Investment Portfolio. It is intended as a quick and easy reference source for investors. The table should not be used as a substitute for reading the appropriate Product Disclosure Statement (PDS) prior to you making any decision to invest through OneAnswer Frontier Investment Portfolio.

The information is of a general nature and has been prepared without taking into account your objectives, financial situation and needs. You should consider whether the information is appropriate for you having regard to your objectives, financial situation and needs. We recommend that you read the relevant PDS before deciding to acquire, or to continue to hold, the product.

The PDS can be located under the following links: Product Disclosure Statement (Part One) (690kb) and Investment Funds Guide (PDS Part Two) (1,018kb) and should be read in conjunction with the Additional Information Guide.

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