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 August 2021
August is always a busy month for ASX investors, as it marks the peak of earnings season, where ASX listed companies report their financial year performance to the market. Adding a level of complexity this year has been the impact of Covid-19, specifically the effects of lockdown on consumer spending amounts and habits, as well as the general operating environment, where uncertainty remains high. In Australia, earnings grew +184% for the six months to June 2021 having been flat for the six months to June 2020, with 48% of companies beating analyst estimates. Looking ahead for the next year, estimates are for earnings to grow by 44.7%.
The ASX200 Accumulation Index gained 2.5% for the month, marking the eleventh consecutive month of gains for the main Index. This is the longest positive monthly streak since the index begun back in 1992, surpassing the 10-month run into May 2007. In a reversal from July, it was the Information Technology sector that gained the most, up 16.8%, while the materials sector reversed course from July, declining 7.9%. The Healthcare and Consumer Staples sectors were also up strongly, gaining 6.8% and 6.5% respectively.
The performance of the ASX, while positive, lagged somewhat behind that in the US, with the S&P500 and Nasdaq100 gaining 2.9% and 4.2% respectively. US companies also announced earnings, with growth at the Index level (S&P500) up 101.6% from the same quarter a year earlier with 86% of companies beating estimates.
From an economic point of view, in the latter half of the month, the focus switched to the Federal Reserve’s annual symposium at Jackson Hole where Jerome Powell avoided a so-called “taper tantrum” when noting the Federal Reserve is likely to announce a tapering of asset purchases before the end of the year. Powell noted that while “substantial further progress” had been met regarding the Fed’s inflation goals, the requirements to lift interest rates from zero are far greater. Notably, inflation needs to average above 2% on a sustained basis and maximum employment is required. With the number of employed still 5.3 million below pre-pandemic levels, achieving this goal is some way off. The decoupling of tapering and rate hike expectations was welcomed by markets and should continue to provide support for risk assets.
Rivkin currently offers four portfolio options on the Mainstream Self-Managed Account (SMA) platform, being ASX Income, ASX Growth, US Growth, and Low Volatility. Both Growth portfolios employ a systematic approach to stock selection, utilising both ‘momentum’ and ‘quality’ factors, and aims to identify high growth companies, whereby returns are predominately generated from capital growth. While the ASX Income portfolio focuses on dividend paying Blue Chips stocks, and corporate events, such as takeover arbitrages. Low Volatility is our multi-asset offering, whereby investments are spread across equities, cash, bonds, and gold.
Looking at the performance for the month of August, the ASX Income portfolio dipped slightly, declining 0.16% net of fees. Within the Blue Chips stocks held, the large miners, being BHP and RIO weighed on performance, declining by 14.7% and 16.0% respectively. On a more positive note, the ASX Growth portfolio had a stellar month, returning 11.96% net of fees, thanks to several big moves across predominantly ‘Quality’ stocks. The top performers included Wisetech Global (WTC, +57.0%), Blackmores (BKL, +37.4%), and Clinuvel Pharmaceuticals (CUV, +35.6%). A large portion of these gains were ‘locked in’ at month end, with both BKL and CUV exiting the portfolio, once our Quality model had digested the updated financials.
The US Growth portfolio increased 3.11% net of fees, with eBay (EBAY, +12.5%), ASML Holdings (ASML, +8.1%), and Moderna (MRNA, +6.5%) the top performers, while Ford Motors (F), and Target (TGT) declined by 6.6% and 5.8% respectively. Lastly, the Low Volatility portfolio gained 1.11% net of fees, with equities higher, while bonds and gold were largely flat for the month.
Looking to the months ahead, and while the broader trends across both ASX and US equities remain to the upside, it is probably not a bad time to remind ourselves that markets rarely go up in a straight line, with corrections and sideways consolidations all part of the investment journey.
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.
*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% | ||||||||||
| US Growth | 2.56% | 3.11% | ||||||||||
| ASX Income | -0.37% | 1.62% | 1.77% | 7.22% | 0.83% | 1.33% | 0.96% | -0.16% | ||||
| Low Volatility | 0.19% | -3.07% | 0.22% | 1.61% | 2.14% | -0.23% | 2.35% | 1.11% |
*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
Please click here or request the PDS to understand the full risks and cost of the product before making a decision to invest in it.
This information has been prepared and issued by Rivkin Securities Pty Ltd (ABN: 87123290602, AFSL: 332 802). It is general information only and not intended to provide you with financial advice, and has been prepared without taking into account your objectives, financial situation, or needs. If you require financial advice that takes into account your personal objectives, financial situation, or needs, you should consult your licensed or authorized financial advisor.
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
