How your portfolio performed
July 2024
Cornerstone’s portfolios put in a steady performance over the June quarter to solidify strong gains for the financial year.
While the flagship balanced portfolio recorded a small loss of 0.15% in the quarter, it delivered a strong 10.53% gain for the 12 months to June 30. This outcome reflects the benefits of sticking to a long-term investment strategy that diversifies capital across a broad range of assets.
Here are the highlights:
- Our strategy of hedging part of our global share investments to minimise the impact of a rising Aussie dollar paid off as the latter rose to more than US67cents.
- An overweight position in emerging markets also buoyed our gains from global shares as markets in Taiwan, South Korea and China jumped more than other countries.
This outcome helped to offset the impact of a slightly underweight position in US shares that had limited the benefit we gained from the recent record highs in US markets. - Our private credit investments – which are larger than some competitors – returned more than 2% to offset some of the decline in traditional fixed income triggered by the uncertain outlook for interest rates.
Looking ahead
Global economies continue to slow and much depends on whether the outcome will be a so-called goldilocks scenario in which the US slows gently, or a harder landing with bigger consequences for business and jobs ensues.
As a result, caution should still prevail for the immediate future. This means:
- We’re maintaining holdings in shares but also using put options to provide some protection for investors from any unexpected fall in stockmarkets. This strategy means Cornerstone clients will benefit if shares rise but also have some protection against a market decline.
- Cornerstone portfolios are underweight high yield debt investments as the expected returns are not high enough to justify the risks in an uncertain economic outlook.
Otherwise, we’ve increased the portfolios’ holding to global real estate investment trusts by reducing an overweight position in Australian real estate investment trusts. This reflects a view that the former are now better value.
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Cornerstone Financial Group Pty Ltd is a wholly owned subsidiary of Invest Blue Pty Ltd (ABN 91 100 874 744) which is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327, Australian Financial Services Licence and Australian Credit Licence No. 232706.
This website contains factual information only about the Cornerstone Portfolios. The information provided is not intended to imply any recommendation or opinion about a financial product. This website has not been prepared having regard to any retail investor’s objectives, financial situation or needs. Before making an investment decision, an investor should also consider the latest disclosure document in respect of the Cornerstone Managed Portfolio (‘‘Disclosure Document’’) and / or seek financial advice in deciding whether to make or continue to hold, an investment in the Cornerstone Managed Portfolio. The Disclosure Document can be obtained by contacting a financial adviser or the platform operator(s) offering the Cornerstone Managed Portfolio.
Russell Investment Management Ltd ABN 53 068 338 974, AFS Licence 247185 (RIM) the investment consultant to Invest Blue Pty Ltd for the Cornerstone Retirement Solution and Cornerstone Managed Portfolios. RIM is also the investment adviser to the issuers of the Cornerstone Managed Portfolios.