February, 2023
The Advance Balanced Multi-Blend Fund produced a negative return over the month of February. Global central banks committed to stay restrictive on monetary policy settings as service-related inflation remained elevated and labour market conditions remained tight. The US Federal Reserve increased US interest rates a further 25 basis points, lifting the Federal Funds Target Rate to a range between 4.50% and 4.75% in February. Both the European Central Bank and the Bank of England raised interest rates by 50 basis points to 2.50% and 4.0% respectively.
The Reserve Bank of Australia delivered another 25 basis points hike moving the overnight interest rate target to 3.35%. The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned -2.5% over the month. International equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned -1.6%. The Unhedged international equities outperformed hedged as the AUD depreciated against other major global currencies, returning 2.1% over the month. Emerging Market Equities, as measured by the MSCI Emerging Markets EM AUD Net Total Return Index, returned -2.3%. Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned -0.4% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -3.6% over the month. Global yield curves shifted higher following the additional increase in interest rates.
The US 10-year treasury yield moved 41bps higher to 3.92%, and the Australian 10-year government bond yield moved 30bps higher to 3.85% over the month. Domestic fixed interest, as measured by the Bloomberg Ausbond Composite 0+ Yr Index, returned -1.3%. International fixed interest markets, as measured by the Bloomberg Barclays GlobalAggregate Total Return AUD Hedged index, returned -1.8%. Over the month both growth and defensive oriented portfolios returned negative results.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Advance-Balanced-Multi-Blend-Fund-factsheet-3.pdfDecember, 2022
The Advance Balanced Multi-Blend Fund produced a negative return over the month of December. Following four consecutive hikes of 75bps this year, the US Federal Reserve decelerated the rate hike in December and lifted Federal Funds Target Rate by 50 basis points to a range between 4.25% and 4.50%. Despite another downside surprise on US November CPI, Fed officials reiterated the hawkish stance and indicated a higher terminal rate of above 5.00% over the next year.
The European Central Bank delivered a 50 basis points hike and increased its deposit rate to 2.00% in line with market expectations. The Reserve Bank of Australia raised the cash rate target by 25 basis points to 3.10%. Risk sentiment was weak heading into the year end, with market concerns around recession risk heightened, signalled by contractionary Service PMI readings in the US. The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned -3.3% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned -5.2%. Unhedged international equities slightly underperformed hedged exposure due to a weaker USD, returning -5.5%. Emerging Market Equities, as measured by the MSCI Emerging Markets EM AUD Net Total Return Index, returned -2.6%.
Chinese offshore equities outperformed as the Chinese government shifts its focus away from Covid containment back towards economic growth. Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned -4.0% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -3.8% over the month. Global yield curves shifted higher. The US 10-year treasury yield moved 27bps higher to 3.88%, and the Australian 10-year government bond yield moved 52bps higher to 4.05% over the month. Domestic fixed interest, as measured by the Bloomberg Ausbond Composite 0+ Yr Index, returned -2.1%. International fixed interest markets, as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged index, returned -1.3%. Over the month both growth and defensive oriented portfolios had negative results.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Advance-Balanced-Multi-Blend-Fund-factsheet-2.pdfNovember, 2022
The Advance Balanced Multi-Blend Fund produced a positive return over the month of November.
A lower-than-expected October US inflation print triggered a rally in stock markets as interest rate expectations shifted lower. This was despite the US Federal Reserve hiking its cash rate target by another 75bps to 3.75-4.00% and its hawkish messaging suggesting a higher terminal rate of above 5%. The US mid-term election concluded with Republicans taking control of the House of Representatives and the Democrats retaining control of the Senate. Domestically, the Reserve Bank of Australia delivered another 25bps rate hike, the first November rate rise since 2010. The Australian Bureau of Statistics released a new monthly CPI indicator, showing a headline inflation of 6.9% year-on-year to October, below market expectations.
The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned 6.5% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned 5.4%. Unhedged international equities returned 2.0%, underperforming hedged exposure as the AUD appreciated against its major global peers. Chinese offshore equities had a sharp rebound with the Hang Seng index rallying 26.6% over the month.
Market sentiment improved with Chinese authorities recalibrating covid restriction rules and laying out measures to address the liquidity crunch in the property sector. As a result, emerging market equities outperformed, returning 9.6% in AUD terms.
Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned 5.8% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned 5.0% over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Advance-Balanced-Multi-Blend-Fund-factsheet-1.pdfOctober, 2022
The Advance Balanced Multi-Blend Fund produced a positive return over the month of October. Risk sentiment improved over the month despite another higher-than expected increase in US Core CPI of 6.6% YoY, and a Headline CPI increase of 8.2% YoY in September. Investors speculated a dovish pivot from the Fed post the November and December FOMC, where rate increases are expected to be kept at the current pace. Domestically, the Reserve Bank of Australia has slowed the pace of rate hikes and raised the cash rate target by 25 basis points, meanwhile headline inflation was reported at 7.3% YoY in the September quarter, expecting to peak in the December quarter of 2022. The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned 6.0% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned 7.2%. Unhedged International Equities returned 7.8%, outperforming hedged exposure as the AUD slightly weakened against its major global peers. Emerging Market Equities returned -2.6% over the month, China has significantly underperformed, with investors disappointed by its unwavering insistence on COVID-zero measures post its 20th National Congress. Listed properties partially recovered from the previous drawdown. Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned 9.9% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned 3.1% over the month. Bond market volatility elevated to historical level over the month as the global bond market saw liquidity pressures, followed by immediate government interventions. The Australian 10-year government bond yield moved 13bps lower to 3.76% while the US 10-year Treasury yield moved 22bps higher to 4.05% over the month. The domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned 0.9% and the International Fixed Interest as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned -0.4%. Funds allocated to growth assets outperformed those with a higher allocation to defensive assets over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Advance-Balanced-Multi-Blend-Fund-factsheet.pdfSeptember, 2022
The Advance Balanced Multi-Blend Fund produced a negative return over the month of September.
Higher-than-expected US inflation has spurred a risk asset sell-off as the market recalibrated to higher interest rate expectations of 4% and above in the US by the end of this year with less likelihood of rate cuts in 2023. The Federal Reserve delivered its third consecutive 75 basis points rate hike and moved its target rate to a range of 3.00%-3.25%, the highest level since 2008. Energy concerns continued to plague Europe, German CPI was reported at 10.9% year on year and pressures remained for European central banks to turn more hawkish. Financial markets turmoil was further fuelled by the UK government’s fiscal plan and its ramification on UK gilts market.
The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned -6.3% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned -8.9%. Unhedged international equities returned -3.2%, outperforming hedged exposure as a result of a stronger USD. Emerging Market Equities, as measured by the MSCI Emerging Markets EM AUD Net Total Return Index, returned -5.9%.
Listed properties sold off as higher interest rates weighed on valuations. Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned -13.6% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -11.8% over the month.
Fear of contagion elevated bond market volatility. UK 10yr gilt yields moved 129bps up to 4.09%, joined by a 57bps increase in German 10yr yield and 62bps increase in Italian 10yr bond yield. The US 10-year Treasury yield also moved 64bps higher to 3.83% over the month and the Australian 10-year government bond yield moved 29bps higher to 3.89%. Credit spreads also widened. As a result, the international fixed interest market, as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned -3.5%; and the domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned -1.4%
Over the month both growth and defensive oriented portfolios had negative results.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/192060665.pdfAugust, 2022
The Advance Balanced Multi-Blend Fund produced a negative return over the month of August. Both the US Federal Reserve and the European Central Bank (ECB) continued their hawkish rhetoric and remained committed to aggressive interest rate hikes. Europe continued to suffer from high energy prices due to the suspension of Russian crude oil and gas supply. The German Producer Prices (PPI) reported its highest-on-record increase in August and the energy supply problem was further exacerbated by the record-breaking droughts from prolonged heatwaves across Europe. Geopolitical risk in the Asia-Pacific region elevated as China carried out military exercises surrounding Taiwan following the US House of Representative Nancy Pelosi’s visit to Taiwan. Led by the strong Energy and Materials sector returns, the domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned 1.2% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned -3.6%. The USD further strengthened as the safe haven currency, unhedged international equities outperformed hedged exposures, returning -2.5%. Unhedged Emerging Market equities, as represented by the MSCI Emerging Markets Net Total Return AUD Index, returned 2.2% over the month. Listed property valuations continued to face a headwind from rising interest rates. Domestic listed property, as measured by the S&P/ASX 300 A-REIT Index, returned -3.6% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -5.7% over the month. Global yield curves shifted higher because of higher cash rates. The Australian 10-year government bond yield moved 54bps higher to 3.60%, the domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned -2.5%. The US 10-year Treasury yield moved 54bps higher to 3.20% over the month, International Fixed Interest as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned -2.7%. Funds with allocations to both growth and defensive assets had negative results over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/191059681.pdfJuly, 2022
The Advance Balanced Multi-Blend Fund produced a positive return over the month of July. Risk sentiment improved despite another uptick in the US headline CPI to 9.1% YoY in July, and a second consecutive 75bps interest rate hike from the US Federal Reserve. Investors speculated a peak in headline inflation and a less hawkish policy setting going forward, following a period of mixed economic signals and the US entering a technical recession over the first half of 2022. Domestically, the Reserve Bank of Australia continued to raise interest rates by 50bps to help contain higher inflation, currently reported as 6.1% YoY in the second quarter of 2022. The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned 6.0% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned 8.0%. Unhedged international equities returned 6.4%, underperforming a hedged exposure as the AUD appreciated against its major global peers.
Emerging Market Equities underperformed, returning -1.7%. Listed property rallied after a large drawdown over the previous quarter. Domestic listed property, as measured by the S&P/ASX 300 A-REIT Index, returned 11.8% and global listed property, as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned 7.7% over the month. The growing concerns of a looming recession pushed longer-term bond yields lower. The Australian 10-year government bond yield moved 38bps lower to 3.06% while the US 10-year Treasury yield moved 10bps higher to 2.65% over the month. The domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned 3.4% and the International Fixed Interest, as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned 2.5%. Funds allocated to growth assets outperformed those with a higher allocation to defensive assets over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/190874647.pdfJune, 2022
The Advance Balanced Multi-Blend Fund produced a negative return over the month of June. In response to the higher-than-expected increase in the Consumer Price Index for June, the US Federal Reserve delivered a 75 basis-point rate hike, the biggest increase since 1994, lifting the target range for the federal funds rate to between 1.5% and 1.75%. The Reserve Bank of Australia has also lifted the cash rate by 50 basis points to 0.85% in June. Risk sentiment remained negative as a result of monetary tightening and a weaker growth outlook. The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned -9.0% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned -8.1%. Unhedged international equities returned -4.6%, as the Australian Dollar depreciated against the stronger US Dollar. Unhedged Emerging Market equities, as represented by the MSCI Emerging Markets Net Total Return AUD Index, returned -2.6% over the month. Listed property valuations were under pressure due to rising interest rates. Domestic listed property, as measured by the S&P/ASX 300 A-REIT Index, returned -10.4% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -7.8% over the month. Global yield curves shifted higher as a result of higher cash rate targets. The Australian 10-year government bond yield moved 31bps higher to 3.66%, the domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned -1.5%. The US 10-year Treasury yield moved 17bps higher to 3.02% over the month, the International Fixed Interest as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned -1.6%. Funds with allocations to both growth and defensive assets had negative results over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/189403117.pdfNovember, 2021
The Advance Balanced Multi-Blend Fund produced a positive return over the month of November.
Equity market volatility escalated towards the end of the month due to the discovery of the Omicron COVID-19 variant and increasing concern that ‘transitory’ inflation may in fact prove to be persistent causing hawkish rhetoric from Federal Reserve officials.
The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned -0.5% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned -1.6%. The Australian Dollar, being a commodity and risk-sensitive currency, materially depreciated against major global peers, as a result, unhedged international equity exposure returned 3.7%. Unhedged emerging market equities returned 1.6%, as measured by the MSCI Emerging Markets Net Total Return AUD Index. Domestic listed property, measured by the S&P/ASX 300 A-REIT Index, delivered a strong return of 4.0% over the month. Global listed property, the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -1.5%
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/181977609.pdfOctober, 2021
The Advance Balanced Multi-Blend Fund produced a positive return over the month of October. Risk sentiment remained positive over the month, supported by strong corporate earnings announcements. High energy prices continued to be the near-term inflationary driver with supply chain issues persisting, exacerbated by extreme weather.
The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, gained 0.1% over the month. International equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, gained 5.4%. The AUD appreciated against major global peers, as a result, Unhedged international equity exposure underperformed hedged exposure, returning 1.7%. Unhedged emerging market equities returned -2.9%, as measured by the MSCI Emerging Markets Net Total Return AUD Index. Domestic listed property, the S&P/ASX 300 A-REIT Index, returned 0.6%, adding to the strong performance in September. Global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, delivered a strong return of 5.6% over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/181274443.pdfAugust, 2021
The Advance Balanced Multi-Blend Fund produced a positive return over the month of August. Risk assets had positive gains over the month, as investment markets anticipated continuing accommodative policies from central banks and a slower pace of QE tapering. This was despite volatility associated with Delta variant outbreaks, supply chain issues, Afghanistan, and the slowing of growth in China.
The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, gained 2.6% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, gained 2.7%. Unhedged international equity exposure outperformed hedged exposure as the USD strengthened, returning 3.1%. Emerging market equities returned 3.2%, as measured by the MSCI Emerging Markets Net Total Return Index. Chinese stock performance remained weak due to ongoing domestic regulatory issues and US-China tension. The Indian equity market, on the other hand, has been the top performer among major equity markets over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/180215252.pdfJuly, 2021
The Advance Balanced Multi-Blend Fund produced a positive return over the month of July. Equities markets traded more cautiously during the month with concern around enduring inflation, slowing global recovery due to the Delta variant and earlier than expected policy tightening. Most developed market equity indices ended the turbulent month in positive territory, supported by central banks’ dovish stance on monetary policy and data from the UK showing the effectiveness of vaccination against hospitalisation.
The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, gained 1.1% over the month. International Equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, gained 1.8%. The Australian Dollar depreciated against most major currency peers, affected by a retreat in commodity prices, extended COVID lockdowns across Australia and risk sentiment. Unhedged international equity exposure outperformed hedged exposure and returned 4.0%. Emerging market equities returned -4.7%, as measured by the MSCI Emerging Markets Net Total Return Index, the cause: a contagious sell-off in Hong Kong and US-listed Chinese stocks triggered by China’s new regulatory crackdown on education companies, in addition to its ongoing scrutiny on IT companies.
Global listed property performed strongly with the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index returning 3.9% over the month. Domestic listed property, as measured by the S&P/ASX 300 A-REIT Index, returned 0.5%. Bond yields pulled back over the month, signalling heightened concern about the growth outlook vis-a-vis long-term inflation. The Australian 10-year government bond yield moved 35bps lower to 1.18% over the month and the US 10-year Treasury yield moved 25bps lower to 1.22%. Credit spreads remained flat. As a result, the domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index, returned 1.8%; and the International Fixed Interest as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index, returned 1.3%. Similar returns across asset classes resulted in funds with higher allocations to growth assets performing in line with those with a higher allocation to defensive assets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/178353858.pdfFebruary, 2021
The Advance Balanced Multi-Blend Fund produced a positive return over the month of February. Reflation trades dominated the market on the prospect of Biden’s $1.9 trillion fiscal stimulus and vaccine rollout. The improved growth and higher inflation expectations drove global bond yields higher. Subsequent weak demand at the US 7-year Treasury auction saw the bond market sell off sharply.
The US 10-year Treasury benchmark yield hit its highest level since March last year (1.40%). Over the month the US 10-year Treasury yield moved 34bps higher, the Australian 10-year government bond yield jumped 78bps higher, while credit spreads marginally narrowed. As a result, International Fixed Interest as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged Index returned -1.6% and the domestic fixed interest market, as represented by the Bloomberg Ausbond Composite 0+ Yr Index returned -3.6%.
Equity markets had a strong start of the month driven by positive sentiment, before stalling due to the bond market sell-off. Long ‘duration’ growth stocks underperformed value stocks given the current reflationary market expectations. The MSCI World ex Australia Net Return AUD Hedged Index returned 2.7% and unhedged international equity exposure returned 1.6%, as the Australian Dollar appreciated against most developed market peers over the month.
The Australian equity market, as represented by the S&P/ASX 300 Accumulation Index, gained 1.5% over the month. Emerging market equities underperformed developed markets in AUD terms, with the MSCI Emerging Markets Net Total Return Index returning -0.1%. Domestic listed property returned -2.5% whereas global listed property returned 2.7%, as measured by the S&P/ASX 300 A-REIT Index and the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, respectively. Funds with higher allocations to growth assets outperformed those with a lower allocation to growth assets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/168491869.pdfasset_class:
asset_category:
peer_benchmark:
broad_market_index:
manager_contact_details: Array
ticker: ADV0050AU
release_schedule: Monthly
structure: Managed Fund
commentary_block: Array
factsheet_url:
http://www.advance.com.au/funds/diversified-multi-blends/balanced-multi-blend-fund.asp
Fund Factsheet
fund_features:
Advance Wholesale Balanced Multi-Blend Fund aims to provide moderate to high total returns (before fees and taxes) over the medium term from a combination of capital growth and income through a diversified mix of growth and defensive assets.
- The Fund invests in a diverse mix of assets with both income-producing assets of cash and fixed interest (around 30%) and growth assets of shares and property (around 70%).
- The Fund’s exposure to these asset classes will be obtained primarily by investing directly into our sector specific funds.
- The Fund may also hold assets directly including derivatives, currency and other unit trusts.