Innova Balanced Model

September 2026

Performance Table

1MTH3MTH6MTH1YR3YR (PA)5YR (PA)INCEPTION (PA)
Innova Balanced Model-0.89%0.53%6.68%5.81%8.81%5.40%5.93%
FE Peer Group Balanced-0.79%-0.35%4.99%4.01%8.60%4.73%5.53%
Excess Returns-0.10%0.88%1.69%1.80%0.21%0.67%0.40%

Portfolio Performance

Innova portfolios declined modestly in September as shares and bonds fell together, a backdrop that offers few places to shelter. Defensive portfolios were down between around 0.5% and 0.8%, while growth oriented portfolios fell between around 0.5% and 1%. Most portfolios held up better than comparable diversified benchmarks, and returns for the financial year to date remain broadly flat.

Australian shares fell close to 2.5% following the RBA's rate increase. Global shares rose almost 2% for Australian investors, largely because a weaker Australian dollar lifts the value of overseas assets when converted back into Australian dollars. Global shares that are hedged, meaning this currency effect is removed, slipped slightly. Our balanced currency exposure allowed portfolios to capture part of that benefit.
Australian bonds fell close to 1% and global bonds around 1.5% as yields rose. Our preference for less interest rate sensitive exposures, including floating rate credit which returned close to 0.4%, helped cushion defensive portfolios. Alternatives added value, with absolute return strategies rising strongly, and emerging markets and value shares were also positive contributors. The main detractors were listed infrastructure and global property, both down around 5% as higher yields weighed on these interest rate sensitive assets, although our underweight to property limited the impact. Smaller companies also lagged.

Asset Allocation Exposure

Breakdown pie chart
Global Shares31.38%
Fixed Interest27.92%
Australian Shares25.97%
Real Assets7.34%
Alternatives4.10%
Cash3.29%

Top Portfolio Holdings

Schroders Equity Opportunities
11.40%
Vanguard Australian Government Bond Index ETF
10.68%
Realm Short Term Income Ordinary
8.93%
Macquarie Australian Shares Fund
8.08%
Franklin Global Systematic Equity Fund
6.65%
AB Global Strategic Core Equities Fund
6.62%
Invesco Wholesale Australian Share Fund
6.49%
Quay Global Real Estate Fund - Hedged
5.07%
Capital Group New Perspective Fund Hedged (AU)
4.77%
Global X Us Treasury Bond
4.55%

Growth of $100,000 since inception

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Market Outlook

September brought a renewed rise in interest rates around the world. Higher energy prices continue to keep inflation above central bank targets, and policymakers responded. The US Federal Reserve lifted rates for the first time since 2023 and signalled another increase may follow before year end, while the European Central Bank and the Bank of Japan also tightened. Locally, the RBA raised the cash rate to 4.60%, its fourth increase this year and the highest level since 2011, and did not rule out further moves.

The result was a sharp repricing in bond markets, with longer dated government bond yields moving materially higher in the US, Europe and Australia. We expect bond markets to remain volatile while energy driven inflation persists, and we continue to prefer fixed income exposures that are less sensitive to rising interest rates. For shares, company earnings remain resilient, but higher yields leave the more expensive parts of the market vulnerable. We therefore remain selective, favouring value shares and emerging markets where valuations are more reasonable, while staying underweight large technology companies and Australian financials. Domestically, households face higher borrowing costs and softer housing prices in most capital cities, which may weigh on consumer spending in the months ahead.

Investment Objective

To deliver a total investment return in line with the benchmark, after fees, over a rolling six year period

Key Information

Inception30/11/2015
Management Fee0.36%
Maximum Expected Volatility9.00%
Standard Risk MeasureMedium to High
BenchmarkRBA Cash Rate Target + 3.0%
Model CodeMACC000034
Investment Timeframe6 years
PlatformNetwealth

About the Manager

Innova is a boutique portfolio management firm with institutional-grade capabilities that specialises in risk-focused portfolio solutions. Co-founded by Dan Miles and Dinyar Irani in 2010, Innova’s objective is to provide robust investment solutions that work with investor behaviour, rather than against it.

Innova has a comprehensive understanding of investment risk and has developed a proprietary risk management framework based on rigorous academic research to support their investment process. Their quantitative framework acts as the compass, with their experienced investment team determining the best approach to execute this outcome. Innova's systematic approach to portfolio construction has enabled them to navigate global markets successfully, even during challenging market cycles.

Innova has consistently adhered to their investment process across all market regimes. They have rigorously tested their process and analysed hundreds of historical data sources to ensure they always have conviction in their investment decision making. As a result, Innova is able to consistently manage portfolio risk during market downturns and their performance track record is a testament to the effectiveness of their approach.

Important Information

This document has been prepared by Innova Asset Management Pty Ltd (Innova), ABN 99 141 597 104, Corporate Authorised Representative of Innova Investment Management, AFSL 509578 for provision to Australian financial services (AFS) licensees and their representatives, and for other persons who are wholesale clients under section 761G of the Corporations Act.
To the extent that this document may contain financial product advice, it is general advice only as it does not take into account the objectives, financial situation or needs of any particular person. Further, any such general advice does not relate to any particular financial product and is not intended to influence any person in making a decision in relation to a particular financial product. No remuneration (including a commission) or other benefit is received by Innova or its associates in relation to any advice in this document apart from that which it would receive without giving such advice. No recommendation, opinion, offer, solicitation or advertisement to buy or sell any financial products or acquire any services of the type referred to or to adopt any particular investment strategy is made in this document to any person.
All investment involves risks, including possible delays in repayments and loss of income and principal invested. Any discussion of risks contained in this document with respect to any type of product or service should not be considered to be a disclosure of all risks or a complete discussion of the risks involved. Past performance information provided in this document is not indicative of future results and the illustrations are not intended to project or predict future investment returns.
The performance reporting in this document is a representation only. Innova has used a calculation methodology to simulate the performance of the relevant Investment Program since commencement, net of all fees and commissions at the fund/security level, and gross of other fees and commissions. Simulated performance does not reflect the performance of any specific account. Each account will have its own unique performance history, due to factors including varied methods of implementation, fee and tax structures. Therefore, simulated performance may vary significantly compared to that of any specific account. The out of sample backtested performance data has been simulated by Innova and is for illustrative purposed only, and is not representative of any investment or product, Results based on simulated performance results have certain inherent limitations as these results do not represent actual trading. No representation is being made that any account will or is likely to achieve profits or losses similar to those being shown.
Although non-Fund specific information has been prepared from sources believed to be reliable, we offer no guarantees as to its accuracy or completeness. Any performance figures are not promises of future performance and are not guaranteed. Opinions expressed are valid at the date this document was published and may change. All dollars are Australian dollars unless otherwise specified.

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