March, 2022
The 1940’s Lifestage Fund produced a negative return over the March quarter, the 12-month rolling performance remained positive. Both equities and bond markets experienced significant volatility over the quarter. The US Federal Reserve turned increasingly hawkish and started hiking interest rates by 25bps in March. The market expects more aggressive rate hikes into the year, and balance sheet reduction or ‘quantitative tightening’ as a result of inflationary pressures and tight labour markets. Sentiment was further exacerbated following the ramifications of Russia’s invasion of Ukraine.
Strong commodity prices provided a tailwind to domestic equities and the Australian Dollar. The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned 2.1%. International Equities, as measured by the MSCI World ex Australia Net Return Index, returned -5.0% on AUD hedged basis and -8.4% on unhedged basis. Emerging market equities underperformed with the MSCI Emerging Markets Net Total Return Index returning -9.9% over the quarter, led by the continuing poor sentiment towards China following growing concerns about forced delisting of the US-listed Chinese companies and the new surge of COVID cases and restrictions across multiple regions in China. Domestic listed property as measured by the S&P/ASX 300 A-REIT Index returned -6.7% and global listed property as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index, returned -3.5% over the quarter.
Bond markets experienced some of the worst drawdowns over the past 30 years, driven by monetary tightening and higher inflation expectations. The US 10-year treasury yield moved 83bps higher to 2.34%, and the Australian 10-year government bond yield moved 117bps higher to 2.84% over the quarter. Credit spreads also widened as market volatility surged. As a result, domestic fixed interest, as measured by the Bloomberg Ausbond Composite 0+ Yr Index, returned -5.9%. International fixed interest markets, as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged index, returned -5.0%.
Over the quarter both growth and defensive oriented portfolios had negative results.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/1940s-Lifestage-Fund-A-BTA0452AU-factsheet-3.pdfMarch, 2021
The domestic equity market, as represented by the S&P/ASX 300 Accumulation Index, returned 4.2%, Global developed equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned 6.2% over the quarter. Unhedged International equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index returned 6.3% with the AUDUSD stabilising to circa 76cents. Emerging markets in AUD terms returned 3.6%, as measured by the MSCI Emerging Markets AUD Index. The performance of domestic and international listed property sectors diverged over the quarter due to different speed in lifting Covid restrictions.
The domestic listed property sector corrected some large gains from the December quarter and ended the March quarter with -0.6% return, as measured by the S&P/ASX 300 A-REIT Index. The global listed property sector returned 7.3% as measured by the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index.
Domestic yields, as measured by the Australian 10 year government bond yield rose 82bps to 1.79% over the quarter, and similarly the US 10 year treasury yields rose 83bps to 1.74%. As a result, Australian fixed interest, as measured by the Bloomberg Ausbond Composite 0+ Yr Index, returned -3.2%. International fixed interest markets, as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged index returned -2.5%. Credit spreads were mostly stable over the quarter
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/1970s-Lifestage-Fund-A-BTA0455AU-factsheet-1.pdfDecember, 2020
The 1970’s Lifestage Fund produced a positive return over the December quarter, resulting in positive 12 month performance. The December quarter started with investor optimism as markets climbed higher during early October. However, investor sentiment soured mid-month as uncertainty over the US election and climbing COVID-19 cases reversed much of the gains. The Nov 3 US election coupled with approvals for a series of vaccinations resulted in strong equity returns during November that persisted into December, despite being softened by further lockdowns and increasing case rates into the western holiday period. The domestic equity market, as represented by the S&P/ ASX 300 Accumulation Index, was the stand out performer over the quarter, returning 13.8%, thanks in part to the Australian response to the pandemic and the additional monetary stimulus the RBA has been able to deliver through rate cuts. Global developed equities, as measured by the MSCI World ex Australia Net Return AUD Hedged Index, returned 11.7% over the quarter vs. a 5.7% increase in the unhedged index.
The Australian Dollar appreciated against its developed market peers due to continuing global risk-on sentiment, ending the quarter buying 76.9c USD, up from 71.6c at the start of the quarter. Emerging markets measured by the MSCI Emerging Markets AUD Index returned 11.2%. The domestic and international listed property sectors returned strongly over the quarter. The domestic listed property sector returned 13.2% but global listed property lagged, returning 10.6%, as measured by the S&P/ASX 300 A-REIT Index and the FTSE EPRA/NAREIT Developed AUD Hedged Net Total Return Index respectively. Global bond yields reached record lows during the COVID-19 pandemic but increased during the December 2020 quarter. Domestic yields, as measured by the Australian 10 year government bond yield rose 18bps, leaving yields at 97bps, compared to 137bps 12 months prior. International yields followed a similar path, with US 10 year yields rising 23bps. A further tightening in credit spreads helped to offset some of the rise in yields, resulting in a -0.1% return for the Bloomberg Ausbond Composite 0+ Yr Index. International fixed interest markets, as measured by the Bloomberg Barclays Global-Aggregate Total Return AUD Hedged index returned 0.8%. Over the quarter funds with higher allocations to growth assets outperformed those with a higher allocation to defensive assets, due to equity markets outperforming fixed interest assets.
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1970’s Lifestage Fund – A
Fund Factsheet
fund_features:
1970s Lifestage Fund — A aims to provide returns (after fees) equivalent to CPI plus 4.2% pa over a 10 year period. It is an actively managed fund, investing in a diversified portfolio of assets. The Fund is invested using the ‘multi-manager’ concept – packaging together high-quality investment managers from Australia and around the globe into a single fund.
- Suitable for superannuation investors born in the 1970’s or earlier with a long term horizon.
- Focusing on growth assets with some capital preservation, invested assets are managed to a glide path in which exposure to growth assets is adjusted according to investors’ age.
structure: Managed Fund