How your portfolio performed in the June quarter
July 2026
The flagship balanced Cornerstone portfolio gained 6.63%1 in the June quarter driven by double-digit returns from its investments in international sharemarkets. The Iran war temporarily slowed market momentum before global shares regained their mojo to reach record highs.
The biggest gains for Cornerstone investors came from the portfolio’s larger-than-usual tilt towards both U.S. shares and emerging stockmarkets like South Korea and Taiwan. The latter jumped as demand for the AI chips produced by companies like SK Hynix, Samsung and Taiwan Semiconductor soared.
Gains from global shares, though, weren’t just about technology this time. The share prices of U.S. healthcare, financial and industrial companies performed better as some giant tech stocks cooled. US small companies also had a bumper quarter.
Capturing returns
The construction of the Cornerstone portfolio meant it was well-placed to capitalise on this shift as much of its assets are split between “active funds” and “passive funds”.
Active funds take deliberate positions in individual stocks instead of owning every company in a stockmarket index. That means they can outperform others when those stock selections pay off, though the opposite may be true if their decisions prove incorrect. The active funds in the Cornerstone portfolio enabled it to capture the gains in global sectors outside technology over the quarter.
Meanwhile, its passive funds helped it benefit from the rise in areas like U.S. small caps. Passive funds aim to simply mimic a market index without taking larger positions on individual stocks.
Long-term focus
Our direct shareholdings in around 30 Australian companies – which make up 16.3%2 of the flagship Cornerstone portfolio – underperformed the broader sharemarket slightly over the quarter for a couple of reasons. Firstly, it held relatively larger positions in some companies which lost value, such as gold companies Ramelius Resources and Newmont. Secondly, it didn’t have any stake in some of the market’s better performing stocks over the quarter (including Computershare and Qantas).
However, over the longer term our direct shares continue to do better than the market overall by gaining 1.67%3 in the three years to June 30.
The fixed income component of the Cornerstone portfolio served its role as a defensive investment by delivering steady returns, even though higher interest rates everywhere crimped the performance of bond and credit markets.
Looking ahead, the portfolio still has a moderate bias to global shares and a slight underweight position in credit markets. The biggest risk to investors is that inflation will spike further, taking interest rates with it. The portfolio’s diversification across shares, bonds and alternative investments is intended to create a ballast if this risk (or any others) materialises.
1Russell Investments, Morningstar Direct
2Russell Investments, Morningstar Direct
3Morningstar Direct
Ironbark Advice is the sponsor of the Cornerstone Financial Group Pty Ltd.
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