OnePath Geared Australian Shares Index

 

Features

Information

APIR codeMMF1785AU
Minimum suggested Investment time frame5+ years
Growth/defensiveGrowth 100%
FE fundinfo sectorEquity - Australia Geared
Income distribution frequencyAnnually
Total fees and costs as at 9 February 20221.73% pa
Fund size$23.91m
Inception date15 November 2010
Establishment Fee (pa)0.00%

Investment minimums

Please refer to PDS 

Pricing

Price date30/06/2023
Entry$3.1426
Exit$3.1451

Standard risk measure

1 2 3 4 5 6 7
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.

Investment objective

The fund aims to achieve returns (before fees, charges and taxes) that magnify the S&P/ASX 300 Accumulation Index returns.

Investment strategy

The fund invests capital and borrowings in a diversified portfolio of Australian shares. The share portfolio comprises approximately 300 of the largest companies (shares) listed on the Australian Securities Exchange (ASX). The fund will hold most of the securities in the S&P/ASX 300 Index (Index), allowing for individual security weightings to vary marginally from the Index from time to time.

Investor profile

The Fund is intended to be suitable for investors seeking to achieve returns (before fees, charges and taxes) that magnify the S&P/ASX 300 Accumulation Index returns.

Research house ratings

Rating

LonsecRecommended

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
Powered by data from FE fundinfo
3 months6 monthsYear to date1 year3 years pa5 years pa
Fund0.33%5.58%5.58%21.45%17.26%9.79%
FE Sector1.60%7.52%7.52%23.34%20.87%10.52%

Calendar Performance

Performance Bar chart
Powered by data from FE fundinfo
31/12/202231/12/202131/12/202031/12/201931/12/2018
Fund-5.62%31.66%-1.65%42.30%-7.66%
FE Sector-5.43%35.09%-1.95%46.01%-10.46%

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 30/06/2023

Breakdown pie chart
Australian shares197.54%
Cash and short-term securities-97.54%

Actual versus target asset allocation as at 30/06/2023

Manager diversification within each asset class as at 30/06/2023

Breakdown pie chart

Top holdings - as at 31/12/2022

Name
Weight
BHP Group Ltd
10.75%
Commonwealth Bank of Australia
8.09%
CSL Limited
6.45%
National Australia Bank Limited
4.41%
Westpac Banking Corporation
3.80%
Australia & New Zealand Banking Group Ltd TEMP
3.29%
Woodside Energy Group Ltd
3.13%
Macquarie Group, Ltd.
2.82%
Wesfarmers Limited
2.42%
Telstra Group Limited
2.14%

Market and portfolio review

The OnePath Australian Shares Index Pool portfolio returned 1.73% during the one month ending 30 June 2023. The portfolio tracked the underlying index, the S&P/ASX 300 Index, which returned 1.73% during the same period. The portfolio aims to provide broader exposure to the Australian equity market across large-, mid-, and small-cap equities. Materials (+1.11%), and Financials (+0.83%) contributed positively to absolute performance. Health Care (-0.67%), Communication Services (-0.04%), and Real Estate (-0.01%) detracted from absolute performance over the period. Among individual securities, BHP Group Limited was the largest positive contributor to absolute performance (+0.71%) while CSL Limited was the largest detractor on an absolute basis (-0.65%).

Future investment strategy

Markets went on a roller coaster ride in March given ongoing concerns regarding banks in the US and Europe. The high-profile failures of Silicon Valley Bank and Signature Bank followed by the crises of confidence in Credit Suisse has put the banking sector under much scrutiny. Fortunately, response from policymakers and regulators to stem contagion was swift and comprehensive. The US government announced a new facility – the Bank Term Funding Program (BTFP) – which allows banks to borrow from the Fed using their bond portfolios valued at par as collateral, eliminating the need to sell assets at a loss to fund withdrawals. Federal regulators also announced that depositors of the failed banks would be paid in full. Meanwhile the Swiss National Bank shored up confidence and served as matchmaker to a shotgun wedding between UBS and Credit Suisse.


While this addressed the problem of contagion created by the crisis and helped contain risks to the financial system as a whole, the debacle has highlighted risks of rapid deposit outflows and potential problems meeting these given the degree of unrealized losses on bond holdings. Investors were also reminded how important confidence is in the financial sector and how vulnerable institutions can be once customer confidence is lost. The MSCI World Financials Index fell by -7.70%.


The full implications for global growth and markets are still being digested. Whether or not stresses will reemerge remains a concern. Further, problems in the banking sector have caused a reassessment of how much more monetary tightening is possible. Still, the FOMC decided to hike rates by 25bps in their March meeting, though it was admittedly a dovish rate hike with guidance around future rate hikes changed. Language referring to “ongoing increases” was removed. Clearly, the Fed has a difficult balancing act ahead of them: with price stability on the one side and financial stability on the other.


That said, we have gotten some signs that US inflation is cooling which could well give the Fed some breathing room. February core PCE price index came in below consensus expectations at 0.30% m/m. US PCE core services ex-housing was only up +0.27%. This is important because this is the category of inflation that Chair Powell is most concerned about. More optimism on inflation rolling over came from personal income growing at a slower than expected pace, as well as softer discretionary spending.


Europe’s inflation is decidedly more challenging. Eurozone HICP fell sharply, but core inflation is still rising. In turn, the ECB hiked rates by 50bps and raised its forecasts for inflation in 2023. The ECB’s decision shows that it remains focused on controlling inflation as its top priority. Some market participants may have viewed the ECB’s decision as a show of confidence, signaling there is no crisis and it is ‘business as usual’ for European banks. European economic activity again proved to be more resilient than anticipated, driven by a stronger service sector.


As a result of the turmoil, treasury yields fell sharply with the 2-year falling below 4% from a high of 5.07%, driven by the view that the Fed will be cutting rates, despite what Chair Powell has said. Fed funds futures are starting to suggest Fed has reached end of tightening cycle. The fall in yields led to a rally in growth stocks, with the Nasdaq returning +9.54%. Gold outperformed as a safe haven asset, but the traditional drivers of lower USD and lower real rates also played their part.