How your portfolio performed
October 2024
Robust gains from markets meant Cornerstone’s portfolios enjoyed a strong start to the new financial year.
The flagship balanced portfolio gained 5.3% in the September quarter by diversifying capital over a broad range of assets in accordance with our long-term investment strategy.
Here are the highlights:
- It was a quarter in which major asset classes (shares and bonds) drove the portfolio’s performance, more so than alternative asset classes which had outperformed in previous quarters.
- A standout contributor to our performance was global real investment trusts after the sector’s strong rally in the quarter. A previous decision to increase our holdings in the sector meant that Cornerstone investors were able to reap the optimal benefit from its gains.
- Our parcel of 30 direct shares also outperformed, with consumer discretionary company, JB HIFI among the top performers.
What we’re thinking now
Notwithstanding the buoyant outlook, financial markets may experience bouts of volatility in the months ahead. Events such as the US presidential election could be a trigger for market swings, though US politics is not traditionally a driver of long-term market performance.
There is still some risk – albeit lower – of a US recession that would impact markets everywhere. As a result, it pays to be cautious and we’re unlikely to make significant investments outside our regular asset allocation.
In this environment:
- We have modestly reduced our bond exposure in some portfolios late in the quarter, particularly in US Treasury bonds, as the sector is not priced as attractively as previously.
- Our previous preference for Australian investments over global assets is fading because the chances of a local recession are now the same as elsewhere. It’s not that the likelihood of an Australian recession has increased – just that a global recession is less likely than before.
- We have retained an underweight to higher risk credit (such as high yield debt) as credit spreads continue to trade very tight, meaning valuations are not assessed as attractive given the stage of the economic cycle.
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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.