Mainstream Separately Managed Accounts allow clients to follow Rivkin’s proven investment strategies without having to trade themselves. Our four portfolio options have been designed to suit various different investor goals.
Monthly Update November 2021
Equity markets pushed higher throughout early November, before softening into month end. In the US, the Dow Jones Industrials was the worst performer of the major indices, declining 3.7%, followed by the broader S&P500, which declined -0.8%. The declines were broad based, with the energy, financials, and communications sectors all down by over 5%. The Nasdaq100 on the other hand, which is comprised of mostly technology stocks, closed 1.8% higher. In Australia, the ASX200 closed -0.9% lower for the month, at 7255.97. Performance across the sectors was quite varied, with heavy selling in energy and financial stocks offset by gains in materials and communications. After peaking around mid-August, the ASX200 has been consolidating within a sideways trading range for the past four months.
The Australian dollar continues to trade quite erratically, selling off strongly throughout November, to close -5.3% lower at 71.28 US cents, in the process, completely reversing the 4.1% rally from October, and trading to the lowest level in 12 months. As we mentioned in last month’s commentary, a weaker AUD/USD does benefit our portfolios with USD exposure, being both US Growth, as well as our Low Volatility portfolio, which has exposure to USD gold and equity assets.
The emergence of the omicron Covid-19 variant has rattled investors somewhat, with the risk that governments will react by reintroducing lockdowns, which will curtail economic activity. Added to this, inflationary pressures remain an issue, with acknowledgement from the US Federal Reserve that higher prices are likely to persist for longer than initially thought. We will have a better idea on the inflation picture in the US this Friday, with CPI data for November due to be released, with the current forecast being an annualised figure of 6.7%.
To the performance of the portfolios, and Rivkin offers four options on the Mainstream Self-Managed Account (SMA) platform, being ASX Growth, US Growth, ASX Income, and Low Volatility. The US Growth portfolio was the standout performer in November, gaining 5.47% net of fees, thanks largely to the weaker Australian dollar. Ignoring the currency effect, and at the stock level, the portfolio was boosted by strong gains in NVIDIA (NVDA, +27.8%) and Pfizer (PFE, +22.8%), while Atlassian (TEAM) was the biggest drag on the portfolio, declining 17.7%. NVIDIA, a maker of semiconductor chips, is a beneficiary of the move towards more advance computing power, such as artificial intelligence (AI), despite more recently facing regulatory headwinds regarding their proposed merger with UK company Arm. Pfizer, on the other hand continues to benefit from the Covid-19 pandemic, and public health response, which includes the wide distribution of their mRNA vaccine.
To our two Australian stock focused portfolios, and ASX Growth declined -0.76% for the month net of fees, which was largely in line with the broader market, while the ASX Income portfolio gained 1.99% net of fees, a decent outperformance. From the ASX Growth Portfolio, stocks within the Value strategy performed relatively better on average, with Pro Medicus (PME) the top performer, gaining 17.3%. While from the Momentum component, strong gains for Lynas Rare Earths (LYC, +21%), was not enough to offset weakness across much of the portfolio.
Regarding ASX Income, the Blue Chips strategy did well, thanks to the likes of APA Group (APA, +16.2%), BHP Group (BHP, +7.6%), and Telstra (TLS, +6.5%). More so, things kept ticking along with our Event Strategy holdings, with payment received for Empired (EPD), Japara (JHC), and Rhipe (RHP) – all solid arbitrage investments – and new positions opened in Ausnet (AST) and Sydney Airport (SYD). AST is off to a good start with FIRB approval already behind us, and we have a few names in the watchlist we are hoping to buy shortly. Take note, however, that activity usually slows coming into the Christmas holidays, but the environment remains conducive to continued corporate activity.
Lastly, the Low Volatility portfolio rallied 3.72% in November, the largest monthly gain in some time, and resulting in the strategy setting in new high-water mark. The components of the portfolio priced in USDs did well, thanks to a weaker AUD/AUD rate, with the GOLD ETF up 5.6%, More so, the three equity ETFs all rallied strongly, being the S&P500 (IVV +7.7%), Nasdaq100 (NDQ +10.8%), and US Total Market (VTS +6.9%). Bond prices were also slightly firmer, with VAF and CRED up 1.5% and 0.7% respectively.
Looking to the months ahead, and despite the recent corrections over the past two weeks, equity markets remain within longer-term uptrends. More so, December tends to be a strong month for equities historically, particularly the last one to two weeks of the year, meaning we anticipate the current pullback to eventually give way to a resumption of the larger uptrends.
All performance data presented in this document relates only to the start date of the SMA portfolios on June 12, 2019. The performance below refers to the model portfolios, net of fees, which will not match exactly everyone’s account while providing an accurate representation. Please use the investor portal or call us to check your account-specific performance.
Please use the investor portal or call us to check your account-specific performance.
*Past performance is not indicative of future performance. The inception date for ASX Growth and US Growth is 1 July 2021. Low Volatility and ASX income inception date is 12 June 2019
The above table shows the returns of each portfolio over various time periods after brokerage, management, and performance fees. Individual account performance may vary from the results above due to a number of factors including, but not limited to, rounding, small variations in stock weightings, and account start date. Please log in to your Mainstream Account to have the most accurate picture of your account’s performance.
As Investors should be aware, we have recently made changes to our SMA portfolios, to simplify our offering. As of this month, we are reporting on the four portfolios now available, being ASX Income, Low Volatility, ASX Growth, and US Growth. Please note that we don’t have historical data for the ASX and US Growth portfolios, as were included in the SMA offering from 1 July 20201, whereas ASX Income and Low Volatility remained unchanged.
For those interested in the historical performance of the individual strategies, please click here
| 2021 | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
| ASX Growth | -0.20% | 11.96% | -3.37% | -2.19% | -0.76% | |||||||
| US Growth | 2.56% | 3.11% | -2.94% | 1.47% | 5.47% | |||||||
| ASX Income | -0.37% | 1.62% | 1.77% | 7.22% | 0.83% | 1.33% | 0.96% | -0.16% | -1.27% | 1.34% | 1.99% | |
| Low Volatility | 0.19% | -3.07% | 0.22% | 1.61% | 2.14% | -0.23% | 2.35% | 1.11% | -1.81% | -1.16% | 3.72% |
*Past performance is not indicative of future performance. The inception date for ASX Growth and US Growth is 1 July 2021. Low Volatility and ASX income inception date is 12 June 2019.
Note: All returns in this document are net of fees, 1.5% management fee (1% for capital Stable); and 10% performance fee where applicable with high watermark ( 5% for capital stable) for the complete list of the fees please refer to the PDS issued by The Trust Company (RE Services) Limited a part of the Perpetual Group.
*$70,000 for US Growth
**5.0% for Low Volatility
****1.0% for Low Volatility
The PDS and target market determination can be obtained by calling 02 8302 3600 or visiting our website.
This information has been prepared and issued by Rivkin Securities Pty Ltd (ABN: 87123290602, AFSL: 332 802).
Important Notice: Please consider your own financial situation before investing in our products. Rivkin does not provide personal financial advice and does not take anyone’s personal financial situation into account when structuring its model portfolios.
Past performance and/or backtesting is not a guarantee of future performance. Investing and trading carry financial risk, when judging performance please consider the different types of investments and levels of risk associated.
The Trust Company (RE Services) Limited (ABN 45 003 278 831, AFSL 235150) (part of Perpetual Group ABN 45 003 278 831 AFSL No 235150) is the responsible entity and the issuer of units in the Mainstream Separately Managed account. It is general information only and is not intended to provide you with financial advice, and has been prepared without taking into account your objectives, financial situation or needs. You should consider the product disclosure statement, available on www.rivkin.com.au, prior to making any investment decisions. If you require financial advice that takes into account your personal objectives, financial situation or needs, you should consult your licensed or authorised financial adviser. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information.
All opinions and estimates constitute judgments of Rivkin and are subject to change without notice. These statements should therefore not be relied upon as an accurate representation or prediction as to any future matters. No company in the Perpetual Group (Perpetual Limited ABN 86 000 431 827 and its subsidiaries) guarantees the performance of any fund or the return of an investor’s capital. Past performance is not indicative of future performance.
PERPETUAL BEING THE ISSUER AND RESPONSIBLE ENTITY UNDER The Trust Company (RE Services) Limited (Perpetual, Responsible Entity, RE, we, us or our), part of the Perpetual Group ABN 45 003 278 831 AFSL No 235150
