Innova Active Moderately Conservative Portfolio

February 2026

Performance Table

1MTH3MTH6MTH1YR3YR (PA)5YR (PA)INCEPTION (PA)
Innova Active Moderately Conservative Portfolio1.41%2.12%3.81%8.50%7.63%-5.38%
FE Peer Group Moderately Conservative1.10%1.52%2.56%6.22%6.32%3.89%3.70%
Excess Returns0.31%0.60%1.25%2.28%1.31%-1.68%

Portfolio Performance

Asset markets experienced increased volatility recently due to the ongoing Iran–US conflict, which began in late February. Economies with high energy dependence on the Middle East, such as Europe and Japan, have been particularly affected through higher inflation expectations and increased growth uncertainty. The conflict has temporarily disrupted shipping through the Strait of Hormuz, which accounts for around 20% of global oil and gas supply.

Despite these risks, fiscal expansion across major economies continues to support risk assets. However, the outlook for monetary policy has become more uncertain. While the risk of persistently high oil prices has increased, market expectations still point to oil prices moderating towards the end of 2026.

Innova’s portfolios outperformed in February across all risk profiles and portfolio suites. Emerging markets outperformed developed market equities, while Australian equities significantly outperformed global markets. Other key contributors included global REITs, infrastructure, and duration exposures, which outperformed credit as bond yields fell during the month, although this trend has partially reversed following the escalation in geopolitical tensions.

Performance was supported by overweights to emerging markets and UK equities, underweights to software, and positioning in real assets. The silver ETF declined 14.32%, while the continued appreciation of AUD/USD meant that hedged exposures outperformed. It is important to note that much of this performance occurred prior to the outbreak of the conflict, and several of these trends have since begun to reverse.

Asset Allocation Exposure

Breakdown pie chart
Fixed Interest35.19%
Global Shares20.89%
Australian Shares16.31%
Real Assets10.23%
Alternatives2.93%
Cash14.46%

Top Portfolio Holdings

Realm Short Term Income Ordinary
14.59%
Macquarie True Index Cash Fund
9.49%
Global X Us Treasury Bond
8.81%
Vanguard Australian Government Bond Index ETF
6.96%
Macquarie True Index Global Infrastructure Securities Fund
5.35%
DNR Capital Aus Eq High Conviction
5.24%
Quay Global Real Estate Fund - Hedged
4.88%
Invesco Wholesale Australian Share Fund
4.48%
Schroder Equity Opportunities Professional
4.46%
Capital Group New Perspective Fund Hedged (AU)
4.06%

Growth of $100,000 since inception

ResetPerformance line chart
3YR1YR
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Market Outlook

Current market focus is centred on the potential duration of the conflict and the associated risk of higher inflation, as well as concerns around the sustainability of AI-driven spending and its potential impact on software companies.

Innova portfolios are positioned to remain resilient to both risks. The portfolios have maintained an underweight position in expensive technology sectors for some time and have avoided highly priced thematic exposures driven by retail momentum.

To address potential energy-driven inflation pressures, active tilts are focused on areas that have historically performed well during inflation shocks, such as UK equities, commodity-exporting emerging markets, and international value equities.

On the fixed income side, we continue to take a cautious approach toward interest-rate sensitive bonds, which has been beneficial given ongoing volatility in rate markets. Portfolios are now more diversified than in recent years and include allocations to alternatives that are largely uncorrelated with both equity and bond markets, helping to mitigate risks in scenarios similar to the 2022 inflation shock.

While the conflict has increased macroeconomic uncertainty through higher oil prices, expansive fiscal policy globally continues to support asset prices. However, the future path of monetary policy—particularly domestically—has become more uncertain. As a result, we remain broadly neutral between growth and defensive assets, while being increasingly selective within asset classes.

Investment Objective

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

Key Information

Inception31/03/2021
Management Fee0.36%
Maximum Expected Volatility7.00%
Standard Risk MeasureMedium
BenchmarkRBA Cash Rate Target + 2.5%
Model CodeINN002MOD
Investment Timeframe5 years
PlatformBT Panorama

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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