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 June 2021
It was a positive end to the 2021 financial year for equity markets, both for the ASX, as well as in the US, with the major indices continuing higher in their respective uptrends. In Australia, the S&P/ASX200 rallied 2.1% in June, to close at a new all time high of 7,313.02. The gains were broad-based, with only the financials sectors closing the month lower, down 0.2%, while it was the information technology sector that was the standout performer, gaining 13.4%. After a period of being out of favour, investors also returned to technology stocks in the US, with the Nasdaq100 gaining 6.3% in June. The broader S&P500 rallied 2.2%, with the bulk of the gains coming from the information technology (+6.9%), energy (4.5%), and consumer discretionary (3.8%) sectors. Investors rotated out of both materials and financials, which declined by 5.5% and 3.1% respectively.
In June, central banks began shifting their stance towards reducing accommodative monetary policy following strong economic recoveries in the U.S. and Australia. Markets have reacted well to this changing stance, with longer-term government bond yields trending lower and yield curves flattening while equities have rallied to new highs. While the economic recovery continues to progress globally, expectations are for the rate of growth to begin to slow which has already been seen in purchasing manager indices, arguably one of the best leading indicators of economic growth. Labour markets have also continued to strengthen in both the U.S. and Australia, although further progress is required with the number of employed in the U.S. still some 6.8 million below pre-pandemic levels. In terms of risks, inflationary pressures remain, driven partly by the commodity complex with rising prices across oil, iron ore, and key building products such as lumber, driven by supply bottlenecks as well as pent-up demand from the pandemic.
Looking at the performance of the Rivkin SMA strategies, of which there are six individual strategies, overall, June was a very good month. Our four ‘growth style’ strategies, being the ASX and US, Momentum, and Value strategies all performed well above the broader market returns. In Australia, the ASX Momentum strategy gained 4.22% net of fees, with Mineral Resources (MIN, +18.4%) and Reece (REH, +15.3%) the top-performing stocks from the portfolio. The performance of ASX Value was slightly higher, with the portfolio gaining 5.58% net of fees, with Pro Medicus (PME, +27.4%) and Wisetech (WTC, +13.1%) the top gainers for the month.
In the US, the US Momentum strategy increased in value by 7.96%, net of fees, for the month, while the US Value strategy gained 6.48%, net of fees. This performance was a combination of the performance of the underlying stocks, as well as the movement in the AUD/USD exchange rate, which declined 3% for the month. As a reminder, the US portfolios are unhedged, meaning that they are impacted by movements in the AUD/USD exchange rate, with a declining AUD/USD rate resulted in an increased value for our US stock portfolio (valued in AUDs), and vice versa. From the US Momentum portfolio, it was Moderna (MRNA, +27.0%) and Tesla (TSLA, +8.7%) who gained the most, while eBay (EBAY, +15.3%), and Skyworks Solutions (SWKS, +12.8%) were the major positive contributors to US Value.
Meanwhile, the ASX Income portfolio gained 1.33%, net of fees, with activity within the event strategy being a little quieter than in recent months. While we saw a few new additions to the portfolio throughout June, we only saw increases to our Vitalharvest (VTH) investment and the end of the bidding war for Mainstream (MAI). Assuming we get the $2.80 offer for MAI through the scheme agreement, our profit on this investment will be 130% in only a few months which demonstrates how important it is to gain exposure to as many of these opportunities as possible. Corporate activity remains elevated, and we anticipate many more opportunities over the months ahead. Lastly, Capital Stable dipped slightly, declining 0.23% for the month, due largely to a weaker AUD Gold price, which declined 5.1% in June. This was mostly offset by gains for IVV, which tracks the S&P500, which gained 4.9%, while government bonds (VAF) gained 0.5%.
Looking ahead, equity markets have run very strongly over recent months, and while the current monetary environment remains supportive for risk assets, the current trends are beginning to become a little stretched from a technical perspective. Nevertheless, we know that equities never go up in a straight line, with uptrends interrupted by corrections and periods of consolidation along the way, meaning pauses in the current uptrend should be expected from time to time.
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 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.
*Past performance is not indicative of future performance
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.
This information/publication 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 authorised financial advisor.
A copy of the PDS can be found on our website, here, 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.
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.
