MultiSeries 70
1 | 2 | 3 | 4 | 5 | 6 | 7 | |
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Standard Risk Measure |
A Standard Risk Measure score of 6 equates to a Risk Label of 'High' and an estimated number of negative annual returns over any 20 year period of 4 to less than 6. This is a measure of expected frequency (not magnitude) of capital losses, calculated in accordance with ASFA/FSC guidelines.
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.
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.
The Fund is intended to be suitable for investors seeking a well-diversified portfolio.
3 months | 6 months | Year to date | 1 year | 3 years pa | 5 years pa | ||
---|---|---|---|---|---|---|---|
Fund | 2.86% | 6.89% | 6.89% | 9.52% | 7.90% | 5.06% | |
FE Sector | 1.89% | 5.85% | 5.85% | 9.17% | 7.14% | 5.03% |
31/12/2022 | 31/12/2021 | 31/12/2020 | 31/12/2019 | 31/12/2018 | ||
---|---|---|---|---|---|---|
Fund | -6.13% | 14.24% | 0.94% | 16.60% | -3.27% | |
FE Sector | -7.80% | 14.50% | 2.87% | 16.82% | -2.64% |
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.
Australian shares | 22.44% | |
International shares | 30.41% | |
Australian fixed interest | 7.12% | |
International fixed interest | 10.35% | |
Australian property | 7.31% | |
International property | 1.74% | |
Alternative - growth | 6.10% | |
Alternative - defensive | 7.45% | |
Cash and short-term securities | 7.08% |
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% |
The asset allocations shown may not total 100% due to the effects of rounding
BHP Group Ltd | 1.95% |
CSL Limited | 1.23% |
Commonwealth Bank of Australia | 1.15% |
National Australia Bank Limited | 0.94% |
Transurban Group Ltd. | 0.74% |
Macquarie Group, Ltd. | 0.72% |
Woodside Energy Group Ltd | 0.67% |
Westpac Banking Corporation | 0.57% |
ANZ Group Holdings Limited | 0.55% |
Telstra Group Limited | 0.54% |
Microsoft Corporation | 1.59% |
Apple Inc. | 0.72% |
Amazon.com, Inc. | 0.70% |
Visa Inc. Class A | 0.49% |
UnitedHealth Group Incorporated | 0.47% |
Alphabet Inc. Class A | 0.45% |
Alphabet Inc. Class C | 0.34% |
Eli Lilly and Company | 0.33% |
NVIDIA Corporation | 0.32% |
Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR | 0.30% |
Tanarra Asia-Pacific secured corporate debt and MLC insurance-related investments portfolios were added during the quarter.
Contributors to performance
The fixed interest portfolio outperformed its benchmark with good performance from the emerging market debt and income trust exposures.
The alternative growth and defensive portfolios outperformed their benchmarks with good performance from mezzanine debt and real estate debt.
The international shares portfolio outperformed its benchmark with good performance from the Royal London intrinsic value portfolio.
Detractors from performance
There were no detractors of significance.
For the March quarter of 2023
Economic
Global growth prospects for 2023 have improved significantly since December, says Fitch Ratings in its latest Global Economic Outlook report, but the impacts of rate hikes on the real economy still lie ahead and are likely to push the U.S. economy into recession later this year. The ratings agency now forecasts world growth in 2023 at 2.0%, revised up from 1.4% in December 2022. While China’s 2023 growth forecast has been increased to 5.2% from 4.1% in December, eurozone growth upgraded to 0.8% from 0.2% and U.S. growth to 1.0% from 0.2%. While growth forecasts for 2024 has decreased from 2.7% to 2.4% to reflect the lagged impact of rapid U.S. Fed and ECB interest rate hikes.
Markets
Share market performance in both the U.S. and Australia was positive for the March Quarter. The S&P 500 rose by 7.03% for the quarter, while the Australian S&P 200 rose by 3.46%.
In Australia, Quality and Equal Weight were the best performing styles for the quarter. Small caps, according to the MSCI World Index, was the only style to produce a negative return (-0.1%). Globally, Growth and Quality were the best performing styles, with Momentum being the only style in negative territory.
Within Fixed income markets, both government bonds and credit gained ground this quarter. The main Australian fixed interest index, the Bloomberg AusBond Composite 0+ Years Index gained 4.6%, while the Bloomberg AusBond Credit 0+ Years Index gained 3.4%. Global High Yield bonds, as measured by the Bloomberg Barclays Global High Yield Total Return Index Hedged into AUD gained 2.3% for the quarter. Given the whole Australian Government yield curve is now lower than it was one month ago, composite Australian Fixed Interest funds are now looking somewhat less attractive, when compared to a month ago, but are still significantly more attractively priced than they were at the start of 2022.
Global equity markets
March was an interesting month for risk assets, especially longer duration growth companies.
Growth companies such as those within the Nasdaq Composite Index bottomed around October last year and rallied strongly into 2023. The market was factoring that Peak US Inflation had passed and we were near to the top of the interest rate cycle. U.S. Government bond yields plunged in March due to the collapse of 3 U.S. regional banks and the fear of systemic contagion. This provided strong support for growth company prices, as the discount rate for their valuations decreased.
The overlap between the performance of Global Growth and Global Quality continued as both rebounded strongly in March and both styles lead over the past 6 months.
Research notes the top ten holdings of the MSCI World Quality Index and the MSCI World Growth Index have 7 companies in common (Microsoft, Apple, Alphabet A & C Class, Nvidia, Meta Platforms, and Visa).
Australian equity markets
The Australian market, as measured by the S&P/ASX 200 Index excluding dividends was down -1.1% over the month of March. The MSCI Australia Index lagged its global counterpart MSCI World Index in local currencies by 2.5% due to lower exposure to technology and higher growth companies, especially compared to the U.S. This can also be seen in the 1-year performance figure, as the MSCI Australia Index wasn’t dragged down by the high valuations in technology and growth companies.
The small companies’ section of the market lagged in both the World and Australian data. While the lower global bond yields provided some support, smaller companies are usually more economically sensitive and a reduction in bond yields due to fears of a credit crunch is not favourable for the economy or small company earnings expectations.
Australian bond market
During the quarter, as far as bonds go, we saw good months in January and March, and a poor performing month in February. Overall, the March quarter was generally positive for bonds. The main Australian Fixed Interest index, the Bloomberg AusBond Composite 0+ Years Index rose by 4.6% for the quarter, which was a great result. Australian yields tightened over the quarter, with the short end (3-year) of the curve falling by 59 basis points. At the long end of the curve, the 10-year yield fell by 75 basis points.
Australian corporate bonds also gained ground over the quarter, with the Bloomberg AusBond Credit 0+ Years Index returning 3.4%.
The yield to maturity at the quarter’s end was 4.05% for Australian Bonds, with the index having around 5.2 years duration. This makes most mainstream Australian Fixed Interest funds significantly more attractive than they were at the start of 2022 when the yield to maturity of the Index was around 1.7% with approximately 5.7 years duration.
US bond market
Over the March quarter, U.S. Government bond yields rose on the short end of the curve but fell on the long end of the curve.
The U.S. yield curve rose most noticeably for the below 1-year range but fell noticeably for maturities of greater than 3 years. Note the 2-year / 10-year part of the curve remains significantly inverted at -109 basis points as at the end of the quarter. This is clearly indicating that a recession is expected.
In the U.S., credit spreads were mixed for the quarter, with Investment Grade credit spreads rising by 10 basis points, while High Yield spreads tightened by around 20 basis points. Overall, global High Yield bonds as measured by the Bloomberg Barclays Global High Yield Total Return Index Hedged into AUD gained 2.3% for the quarter. Note the U.S. makes up the large majority of the high yield market globally.
While the small widening in investment grade credit spreads detracted from performance for the quarter, the duration element of this market more than offset the small loss from the spread widening.
While nominal yields on corporate bonds continue to look reasonable on face value, most major U.S. economic indicators, with the exception of unemployment, continue to show the U.S. is in an economic downturn. So, at this point in the cycle, we continue to see duration exposures as somewhat preferable to credit.
Currencies
The ICE US Dollar Index (DXY) – a measure of the currency’s strength against a basket of mainly trading partner currencies including the Euro (EUR), Japanese Yen (JPY) and British Pound (GBP) – stood at the 102.5 as of 31 March, declining from its early March short-term highs.
The U.S. bond market yields reacted very quickly and strongly to the collapse of Silicon Valley Bank, Silvergate Bank and Signature Bank, with sharp declines across the yield curve. The U.S. 2-Year Government Bond yield declined 1.02% in 3 days. This sharp move in U.S. yields removed the strong interest rate differentials favouring the U.S. dollar and as a result, the Euro, Pound and Yen rebounded. The DXY remains well above its level prior to this round of interest rate hikes.
Commodities
The S&P GSCI Index declined -1.34% in March. Energy commodities continued to re-normalise, as the dislocation and fears of a lack of supply due to the invasion of Ukraine drove the prices higher mid last year. Warm winters in both Europe and the U.S. helped reduce the demand for natural gas and thermal coal, allowing stockpiles to build back up. As can be seen in the chart below, the brent oil price is back to pre-Ukraine invasion prices.
Commodities were also hit by the fear of global slow down following the collapse of three regional banks in the U.S. and the “forced” acquisition of Credit Suisse by UBS in Europe. Concerns of a credit crunch driven recession that would reduce growth and demand globally weighed on commodities. Oil was quick to retreat on reduced global demand, but as can be seen in the chart below, rebounded quickly as the U.S. and Swiss governments reacted quickly to their banking challenges.
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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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