September, 2023
In September, the Fund returned -2.01% in gross terms and -2.07% net of fees. Risk assets including equities and the Australian dollar were the largest detractors. The exposures to NASDAQ and the VanEck Wide Moat strategies declined the most as tech stocks sold off. Global equities were also dragged down by the underperformance of US shares. Australian equities were also down in September as deteriorating risk sentiment and continued concerns around China weighed on the local market.
Fixed income overall also detracted over the month — especially the long duration exposures. Australian and US government bonds sold off as yields rose. Shorter duration exposures managed to post positive returns over the month including syndicated loans, floating rate note and subordinate debt exposures.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-gb-NN_AU60CRS00025-2.pdfAugust, 2023
In August, the Fund returned -0.61%in gross terms and -0.68% net of fees.
Risk assets including equities and the Australian dollar were the largest detractors over the month. China exposure, which had been reduced, sold off as concerns around the property sector grew with Chinese equities ending the month down -8%. Developed market equities were the most sizeable detractor as Australian equities sold off by -0.73% and global equities hedged to AUD sold off by -1.83%.
Fixed income exposures across government bonds, syndicated loans and floating rate notes were typically up over the month but could not compensate for the Fund's negative return.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-gb-NN_AU60CRS00025-1-1.pdfJuly, 2023
In July, the Fund returned 1.66% in gross terms and 1.58% net of fees.
Most asset classes posted positive returns with the bulk of the contribution coming from equities and alternatives exposures over the month. Our fixed income duration exposures, on the other hand, detracted slightly on the back of higher yields.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-gb-NN_AU60CRS00025-1.pdfJune, 2023
In June, the Fund returned -0.15% in gross terms and -0.22% net of fees.
The main detractor in the Fund was the allocation to alternatives. Higher government bond yields during the month resulted in modest declines across infrastructure companies. However, we continue to see compelling long-term return opportunities with infrastructure, reflecting stable income across different economic scenarios and positive inflation linkage. Our rates exposure also detracted as yields on Australian government and global government bonds rose. Elsewhere, our equity and credit exposures also contributed.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-gb-NN_AU60CRS00025.pdfApril, 2023
In April, the Fund returned 1.06% in gross terms and 0.99% net of fees. The portfolio still maintains an overall defensive stance in its positioning, slightly underweight across all asset classes in favour of cash. Across equities, we still maintain a preference for defensive styles and Asia Pacific equities which, while positive over the month, lagged the broader market. The AUD also continued its decline, limiting the overall level of upside captured from equity allocations although equities were still positive contributors. Our fixed income exposure contributed positively across the board. The Syndicated Loan Fund returned 1.43% for the month, while the Australian corporate bond and floating rate note exposures returned in the region of 0.5% each. The Subordinated Debt and Frontier Market Bond funds lagged but still posted positive returns over the month.
File:February, 2023
In February, the Fund returned -2.28% in gross terms and -2.34% net of fees. The portfolio still maintains an overall defensive stance in its positioning, slightly underweight across all asset classes in favour of cash, while risk assets are tilted toward more defensive styles, particularly across equities. Despite this positioning, the equity exposures could not avoid the general downturn seen across markets in February. Asian exposures underperformed developed markets over the month, giving back some of the strong gains in January. In fixed income, the syndicated loan strategy, floating-rate notes and subordinated debt posted positive returns, while the government bond exposures sold off as yields moved higher.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/F_COMDOC_en-gb-NN_AU60CRS00025.pdfJanuary, 2023
In January, the Fund returned 2.25% in gross terms and +2.17% net of fees. The portfolio still maintains an overall defensive stance in its positioning. It also remains slightly underweight across all asset classes in favour of cash while risk assets are tilted toward more defensive styles particularly across equities. In fixed income, the syndicated loan strategy and the recently added exposure to floating-rate notes and subordinated debt enjoyed rallies throughout the month, posting positive returns as more traditional government bonds sold off.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-12.pdfDecember, 2022
In December, the Fund returned -0.68% in gross terms and -0.75% net of fees. The portfolio maintains a defensive stance given the numerous headwinds we believe remain ahead, which includes a US recession. Therefore, the portfolio is slightly underweight across all asset classes in favour of cash.
Our more cautious approach to the impending risks that we see also means that as we go into the new year, the portfolio remains tilted towards more defensive styles of equities, which softened the drawdown through December as markets sold off across the board. In fixed income, the syndicated loan strategy and the recently added exposure to floating-rate notes and subordinated debt enjoyed rallies through the month to post positive returns as more traditional government bonds sold off.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-11.pdfOctober, 2022
In October, the fund was up by 0.75% in gross terms, and by 0.65% net of fees. The portfolio's exposure to equities contributed positively with equities being up almost across the board with the exception of EM and China. Fixed income which is mainly orientated towards the domestic market also contributed positively over the month. The listed alternatives, having been a detractor last month, rebounded to post positive returns this month. In particular, social housing/property exposures rebounded strongly as well as the exposure to litigation financing contributed to returns. On portfolio activity, there were no significant changes to portfolio allocations over the month. We maintained reduced allocations to equities, fixed income and alternatives in favor or cash. We continue to have around 30% in cash in the portfolio given the fundamental risks that still exist and the more attractive yields that cash provides as the RBA continues to increase the cash rate. With such a large cash exposure in the portfolio, we are ready to deploy back to risk assets when sentiment improves, and opportunities arise.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-9.pdfSeptember, 2022
In September, the fund fell by -3.05% in gross terms and by -2.96% net of fees. The portfolio's exposure to equities, fixed income and infrastructure/real estate, held as part of the listed alternatives (alts) exposure, detracted from the overall performance. However, this was partially offset by the positive contribution from futures and spot exposure. Year to date, the fund is down by -12.23% gross of fees.
In terms of portfolio activity, we continued to maintain a reduced allocation to equities, fixed income and alternatives in favour of cash. We trimmed down alternatives to ensure that the asset class did not lead to an outsized contribution to total portfolio risk. However, some of these holdings were exposed to the overall sell-off in the UK, which resulted in a negative contribution, primarily from the infrastructure and real estate holdings.
We now have around 30% cash in the portfolio, ready to deploy when opportunities arise. However, given weaker fundamentals and continued inflationary pressures, we maintain our overall bearish view around markets. These factors will likely feed into our recessionary base case and manifest in weaker corporate earnings.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-8.pdfAugust, 2022
In August, the fund returned 0.31% in gross terms, and 0.24% net of fees. The fund has a reduced exposure to both equities and fixed income in favor of cash. Across equities the current exposure reflects a tilt towards Australian equities, which was one of the few positive equity markets over the month and contributed positively to the overall performance. International equities sold off through the month and detracted. However, exposure to the abrdn Asian Opportunity Fund, which posted a positive return, contributed positively. Fixed income markets continued to sell off over the month but the Betham Syndicated Loan Fund and the EM Corporate Bond Fund both posted positive returns. Domestic bond exposure led to an overall performance drag. Year to date, the fund is down by -9.47% (gross of fees).
During August, our view towards developed market equity turned less negative, as we saw signs of peaking US inflation, a more data-dependent Fed and further supportive market signals. We added US and Australian equities marginally. The observation of inflation peaking and economic growth slowing improved our outlook for developed market government bonds, so we also added to Australian government bonds
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-7.pdfJuly, 2022
In July, the portfolio returned 0.93% in gross terms and 0.86% net of fees. Over the year, we reduced our exposure to equities and fixed-income assets, given risks in the market, but those exposures still maintained in the portfolio contributed to the positive return in July. Over the year to date, the portfolio is down by -9.74% (gross of fees). On portfolio activity, since early July, we continued to reduce equity risk and rotate from markets, such as EMs. This included sales of the abrdn Emerging Opportunities Fund, as well as the China equity exchange-traded fund, as short-term risks from renewed Covid lockdowns and signs of property sector stress spread across eight provinces. Given the decrease in international equities, we also trimmed our Australian equities exposure, via the abrdn Ex-20 Australian Equities Fund, in order to maintain the relative weighting of Australian equities to international equities. To further reduce the overall risk in the portfolio, we reduced our exposure to Chinese bonds, given the less attractive relative level of yield and risks to the growth outlook.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-6.pdfFebruary, 2022
In February, the portfolio fell by 1.24% in gross terms and by 1.30% net of fees. The portfolio's exposure to equities and fixed income and its absolute return strategies detracted from performance, although this was slightly offset by positive performance from S&P 500 put options and the infrastructure bucket. Over the year to date, the portfolio is down by 4.41% (gross of fees).
In portfolio activity, we trimmed 1% from US high yield (HY) on 9 February. In addition, with the reduction in EM debt, HY and loans in late January, we trimmed sub-investmentgrade credit by about 6% in total over the two weeks from the end of January to early February.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-5.pdfDecember, 2021
In December, the Fund rose by 1.93% in gross terms and by 1.86% net of fees. The portfolio's exposure to fixed income, equities and infrastructure contributed. The Fund's spot exposures and options detracted slightly from returns. Over the year to date, the Fund remains up by 10.07% (gross of fees). In view of potential volatility in equity markets, we continued to buy calls on the VIX Index, funded out of short S&P 500 Index (SPX) puts, to provide cost-efficient protection. We consider this a strategic, rather than tactical, move to hedge against a major sell-off in US stocks. In such a
situation, gains from the long VIX calls will more than offset losses from short SPX puts. The entry positions on both contracts are sized so that the net cost is close to zero. Meanwhile, we added 2.5% to MSCI World Index futures, in light of the recent weakness in equities. As we have seen more data on Omicron, it is a variant with higher transmissibility but less severe symptoms, so we do not think it will derail the global recovery
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-4.pdfNovember, 2021
In November, the Fund fell by 1.01% in gross terms and by 1.08% net of fees. The portfolio's exposure to fixed income, particularly global high yield and frontier markets, detracted. Over the year to date, the Fund remains up by 7.98% (gross of fees).
In view of potential volatility in equity markets, we continued to buy calls on the VIX Index, funded out of short S&P 500 Index (SPX) puts, to provide cost-efficient protection. We consider this a strategic, rather than tactical, move to hedge against a major sell-off in US stocks. In such a situation, gains from the long VIX calls will more than offset losses from short SPX puts. The entry positions on both contracts are sized so that the net cost is close to zero
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/F_STD_en-GB-NN_AU60CRS00025-1.pdfOctober, 2021
In October, the fund rose by 1.87% in gross terms, and rose by 1.8% net of fees. The exposure to equities, particularly US stocks, and infrastructure boosted returns, though our fixed income positioning detracted. Over the year to date, the fund remains up by 9.09% (gross of fees), despite the volatile market environment.
In view of potential volatility in equity markets, we bought calls on the VIX Index, funded out of short S&P500 Index (SPX) puts, to provide cost-efficient protection. We consider this a strategic, rather than tactical, move to hedge against a major selloff in US stocks. In such a situation, gains from the long VIX calls will more than offset losses from short SPX puts. The entry positions on both contracts are sized so that the net cost is close to zero.
Looking forward, global economic growth is still robust, but appears to be moderating and increasingly divergent. Inflation is expected to remain somewhat elevated as supply chains and reopenings catalyse at least temporary price distortions, with the potential for it to become persistent in certain countries. Although some central banks have started to consider, or implement, tapering of quantitative easing measures, this does not reflect a broad tightening of monetary policy yet, in our view. We are monitoring the surge in energy prices, driven by green policies and supply constraints due to the pandemic and geopolitical developments.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-3.pdfSeptember, 2021
In September, the fund fell by 1.51% (gross of fees) and 1.58% (net of fees). The portfolio's exposure to equities, particularly US stocks, and fixed income, notably Asian high yield bonds, was negative. That said, the fund has still advanced by 7.08% (gross of fees) over the year to date, despite a volatile market environment
During the month, we implemented a relative value trade. We shorted Korean equities in view of the KOSPI Index's muted profit outlook, while taking a long position in broad global equities.
In view of potential volatility in equity markets, we bought calls on the VIX Index, funded out of short S&P500 Index (SPX) puts, to provide cost-efficient protection. We consider this a strategic, rather than tactical, move to hedge against a major selloff in US stocks. In such a situation, gains from the long VIX calls will more than offset losses from short SPX puts. The entry positions on both contracts are sized so that the net cost is close to zero
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-2.pdfAugust, 2021
The fund returned 1.85% (gross of fees) and 1.78% (net of fees) in August. The exposure to equities, particularly Australian and US stocks, contributed the most. The allocation to fixed income and infrastructure boosted portfolio returns as well. Over the year to date, the fund has risen by 8.72% (gross of fees), despite a volatile market environment.
In August, we pared our exposure to broad global equities and recycled the proceeds into global healthcare and metals mining stocks. We believe these sectors stand to benefit from structural tailwinds of the long-lasting impact of Covid-19 and the increasing push towards green energy
Looking forward, our base case scenario remains for above-trend global growth for the rest of year, driven by vaccine rollouts and accommodative fiscal and monetary settings. Although some central banks have started to consider, or implement, tapering of quantitative easing measures, this does not reflect a tightening of monetary policy yet, in our view. We retain a pro-equity stance, supported by expectations for solid earnings growth.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7-1.pdfMay, 2021
The Fund will apply dynamic asset allocation to a diversified portfolio of traditional and alternative assets, without reference to a benchmark.
The Fund may shift its investments quickly and significantly, based on valuations and expected returns, and may completely divest from a particular asset class. Fund volatility will be controlled through the use of dynamic asset allocation and effective diversification of assets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/F_STD_en-GB-NN_AU60CRS00025.pdfApril, 2021
The fund returned 2.51% (gross of fees) and 2.44% (net of fees) in April.
Most assets contributed positively, particularly the fund's allocation to equities. Our fixed income exposure, including frontier markets bonds and global high yield bonds, alongside other non-traditional asset classes, such as infrastructure and litigation financing, also added value.In April, we tweaked our equity exposure. Notably, we rotated away from Future Mobility ETF, given its high exposure to technology and growth stocks. We also trimmed our exposure to broad global equities, taking some profits on developed market stocks after their robust outperformance in the year to date.
Conversely, we raised our exposure to US financials, which offered more attractive valuations and are likely to benefit from the next leg of the economic recovery and rising interest rates. We also started to add back to China A Share equities, given the market's underperformance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/C_COMDOC_en-GB-NN_SCSDM7.pdfDecember, 2021
The fund posted a gross return of 0.38% in January, largely thanks to positive contributions from the Emerging Opportunities, Syndicated Loans and Asset-backed Securities funds. Across world markets, appetite for risk assets remained robust in the new year. Optimism over newly inaugurated US president Joe Biden’s proposed US$1.9 trillion stimulus plan, as well as the US Federal Reserve’s continued support for a loose monetary policy, propelled global stocks for most of January.
However, a surge in volatility in the final week due to high-profile short squeezes in a number of US stocks weighed on broader markets and erased earlier gains. Bond markets were unperturbed by the extreme stock market volatility, but prospects of more US stimulus led to an increase in government bond yields (prices fell). On a total return basis, stocks fared better than bonds, though both asset classes ended the month in the red. In equity, emerging markets again outperformed their developed-market counterparts.
Asian stocks led the way, as better-than-expected Chinese GDP data raised hopes that strength in the world’s second-largest economy would underpin growth in the region. China was the top gainer, on the back of encouraging growth figures and fevered retail trading. Japanese shares also rose as receding political uncertainty in the US offset rising nervousness about vaccination timelines.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/142832-CD-SF3230D3101210002.pdfasset_class: Multi-Asset
asset_category: Real Return
peer_benchmark: Multi-Asset - Real Return Index
broad_market_index: Multi-Asset Growth Investor Index
manager_contact_details: Array
ticker: CRS0002AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
Literature => Monthly Commentaries (PDF)
fund_features:
Aberdeen Standard Multi-Asset Real Return Fund aims achieve a real return equivalent to 5% per annum above inflation (before fees) over a full market cycle (generally 3 to 5 years). The Fund will apply dynamic asset allocation to a diversified portfolio of traditional and alternative assets, without reference to a benchmark. The Fund may shift its investments quickly and significantly, based on valuations and expected returns, and may completely divest from a particular asset class.
structure: Managed Fund