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 October 2020
Both the Australian and US equity markets tracked a similar path throughout October, with prices rallying higher during the first half of the month, only to then weaken into month end. As we mentioned in our update for September, we suspected that volatility would increase during October, largely because of the US election in early November. And while we did see a minor selloff into month end, prices have rebounded rather quickly this week, suggesting that any major fears surrounding the election were unfounded.
The initial rally for the ASX Accumulation Index was stronger than what occurred in the US, and as a result, even after a relatively quick selloff into the end of the month, the Index ended the month for a gain of 1.93%. While in the US, a smaller rally unfolded, which was more than completely reversed by month end, with the S&P500 closing 2.66% lower, while the tech heavy Nasdaq100 declined 3.20% for the month.
Rivkin offers six different underlying strategies on the Mainstream SMA platform, which we combine into four recommended portfolios. Two of these, ‘Smart Growth’ and ‘Defensive Income’, are focused on ASX investments. During October, our growth focused portfolio, Smart Growth performed strongly, gaining 4.18% after fees, well above the broader market. While Defensive Income, our income focused strategy declined -0.22%, due to a relatively weaker performance from ASX blue chip stocks and hybrid securities. Historically, hybrid securities have been a great way to earn an income, with a relatively low risk in capital. However, as an asset class, they are becoming less attractive given the current low interest rate environment. Just this week, the RBA cut the cash rate to a historical low of 0.1%. The third of our suggested portfolios, ‘Global Growth’, which has approximately 60% weighting to US equities was largely flat, declining 0.05%, while Capital Stable increased by 0.81%.
At the strategy level, it was the ASX Momentum Strategy which was the top performer, gaining 5.22%, with Afterpay (APT) the top performer of the month, gaining 20.9%. ASX Value was also solid, increasing 3.15% in value, with ARB Corp (ARB) and Altium (ALU) amongst the better performing stocks. In the US, US Momentum held up relatively well, declining -0.70%, while US Value underperformed, declining 5.06%. We have had some good news regarding this strategy in early November however, with Biogen (BIIB) gaining close to 40% on Wednesday following FDA support for the company’s Alzheimer drug.
With the uncertainty of the US election now largely behind us, equity markets will begin discounting what 2021 has in store. With Joe Biden holding a commanding position to take the presidency, while the Republicans will retain the Senate, we are currently looking towards at least 2 years of gridlock in Washington. This may actually prove a positive for US equity markets, as the proposed US corporate tax hikes by Biden will now likely stall, while the recent push by the Republicans to break up the tech giants will now be off the table. The big unknown will be the size of the next round of government stimulus, however post-election both parties will be more eager to get a deal done.
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, while providing an accurate representation, will not match exactly everyone’s account. Please use the investor portal or call us to check your account-specific performance.
*Past performance is not indicative of future performance
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 accounts performance.
The table below presents performance on a monthly basis for each of the portfolio options. Again, results in this table are after brokerage and fees.
Returns for June represent performance from the launch date of 12 June 2019 to the end of month.
*Past performance is not indicative of future performance
Rivkin also offers its original investment strategies on the SMA platform. The table below shows the returns of these strategies.
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.
**5.0% for Capital Stable
*1.0% for Capital Stable
This product PDS is issued by The Trust Company (RE Services) Limited a part of the Perpetual Group, ABN 45 003 278 831,AFSL No 235150.
Please search our website or request the PDS to understand full risks and costs of the product before taking decision to invest in it.
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.
To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. 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.
Important Notice:
Performance data shown represents past performance. Past performance 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.
All information and data on this post are provided in good faith and are believed to be accurate and reliable at the time of publication. However, the returns shown in this post might differ from yours due to various reasons such as the time you have entered the market and the amount invested. If you are seeking for clarification, please contact us on 1300 748 546.
