September, 2023
The Fund was down 2.44% during September, in comparison the benchmark was down 2.36% over the same period. From a positioning perspective at the end of September, Australian Fixed Income is the largest allocation within the Fund (52%), with the balance split across Australian Equities (47%) and Cash (1%).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-mc-tactical-allocation-au-6.pdfAugust, 2023
The Fund aims to earn an after-fee return in excess of the Benchmark over rolling five-year periods. The Benchmark is a composite of 50% the S&P/ASX 200 Accumulation Index and 50% the Bloomberg AusBond Treasury Index.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Factsheet-MartinCurrieTacticalAllocationFund-AClass-90036-AA1-FF-AU-en-AU.pdfJune, 2023
The Fund was down 0.07% during June, in comparison the benchmark was down 0.26% over the same period. From a positioning perspective at the end of June, Australian Fixed Income is the largest allocation within the Fund (66%), with the balance split across Australian Equities (33%) and Cash (1%).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-mc-tactical-allocation-au-5.pdfSeptember, 2022
The Fund was down 4.10% during September, in comparison the benchmark fell 3.79% over the same period. The Fund’s allocations to both Australian Equities and Australian Fixed Income both fell over September with Australian Equities the main drag on absolute performance over the month. From a positioning perspective at the end of September, Australian Equities is the largest allocation within the Fund (62%), with the balance split across Australian Fixed Income (36%) and Cash (2%).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-mc-tactical-allocation-au-4.pdfJune, 2022
The Fund was down 3.70% during June, outperforming the benchmark which fell 5.04% over the same period. The Funds allocations to both Australian Equities and Australian Fixed Income both fell over June with Australian Fixed Income the main drag on absolute performance over the month. From a positioning perspective at the end of June, Australian Equities is the largest allocation within the Fund (52%), with the balance split across Australian Fixed Income (46%) and Cash (2%).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-mc-tactical-allocation-au-3.pdfMarch, 2022
The Fund was down 1.02% during March, while the benchmark gained 1.43%. The Fund's relative underperformance was driven by the overweight to Australian Fixed Income as the sector underperformed the broader Australian Equity market (as measured by the S&P/ASX 200 Accumulation Index). At the end of March, Australian Fixed Income is the largest allocation within the Fund (75%), with the balance split across Australian Equities (24%) and Cash (1%).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-mc-tactical-allocation-au-2.pdfDecember, 2021
The Fund was up 0.79% during December while the benchmark gained 1.36%. The Funds relative underperformance was driven by the overweight to Australian Fixed Income as the sector underperformed the broader Australian Equity market (as measured by the S&P/ASX 200 Accumulation Index). At the end of December, Australian Fixed Income is the largest allocation within the Fund (64%), with the balance split across Australian Equities (23%) and Cash (13%)
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-mc-tactical-allocation-au-1.pdfSeptember, 2021
The Fund was down –0.75% during September while the benchmark fell –1.83%. The Funds relative outperformance was driven by the overweight to Australian Fixed Income as the sector outperformed the broader Australian Equity market (as measured by the S&P/ASX 200 Accumulation Index). At the end of September, Australian Fixed Income is the largest allocation within the Fund (64%), with the balance split across Australian Equities (21%) and Cash (16%)
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-mc-tactical-allocation-au.pdfAugust, 2021
The Fund was flat during August while the benchmark gained 1.35%. The Funds relative underperformance was driven by the overweight to Australian Fixed Income as the sector underperformed the broader Australian Equity market (as measured by the S&P/ASX 200 Accumulation Index). At the end of August, Australian Fixed Income is the largest allocation within the Fund (70%), with the balance split across Australian Equities (13%) and Cash (17%).
The Australian equity market rose 2.5% in August (as measured by the S&P/ASX 200 Accumulation Index), with ongoing local lockdowns attempting to curb spread of the Delta variant continuing to be the dominant theme. Growth-style stocks modestly outperformed Value and high-yielding indices lagged in correlation with large dividend paying iron ore miners. During August’s reporting season we saw very strong reported results versus consensus expectations, strong cash flows and balance sheets driven by Government stimulus, and dividends per share upgrades. There was also a significant number of capital management, merger & acquisitions and capex spendannouncements.The Bloomberg Ausbond Composite Index returned 0.09% in August, as yields on average fell during the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-lm-mc-tactical-allocation-5.pdfJuly, 2021
The Australian equity market rose 1.1% in July (as measured by the S&P/ASX 200 Accumulation Index), with spread of the Delta variant globally, Sydney’s lockdown and increasing M&A activity the dominant themes. Bond yields fell over the month, and while Growth-style names were stronger we did see a late swing to Value.
At the sector level, metals & mining was the best performer despite commodity prices moderating during the month, the exception being gold which rose as investors became increasingly risk-off. Industrials were also strong. Information technology was the weakest sector, negatively impacted by the Chinese Governments’ regulatory clampdown, which is focussed on reeling in its large technology stocks. The Bloomberg Ausbond Composite Index returned 1.76% in July, the highest monthly return since the onset of the pandemic, although the index was still marginally lower over the year to date.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-lm-mc-tactical-allocation-4.pdfJune, 2021
The Fund was up 0.49% (net of fees) in June and 1.77% for the quarter. The Fund’s relative underperformance was driven by the underweight to Australian equities as the sector returned 8.29% (as measured by the S&P/ASX 200 Accumulation Index) over the quarter. During June, the allocations within the Fund remained largely unchanged. At the end of Q2, Australian Fixed Income is the largest allocation within the Fund (82%), with the balance split across Australian Equities (5%) and Cash (12%).
The Australian equity market rose 2.15% in June (as measured by the S&P/ASX 200 Accumulation Index), and 8.3% for the quarter. At the sector level, information technology was the best performer, supported by a decline in bond yields, which fell on peak growth data and tapering talk from the US Federal Reserve, despite concerns of inflation which is seen as transitionary. The technology sector is also benefitting from the banking sector’s adoption of Buy Now Pay Later (BNPL) services. Consumer discretionary was also strong, while utilities were the weakest sector, dragged down by AGL Energy. Unusually, energy was also weak despite an elevated oil price.
The Bloomberg Ausbond Composite Index returned 0.69% due to the rally in mid- to long-dated bonds. The Fixed Income allocation within the Fund outperformed the broader Australia Fixed Income return during June and also for the quarter. Tighter spreads in the corporate sector where portfolios have the largest overweight combined with carry on the sector to provide the majority of alpha. An overweight in semi government spread duration, detracted due to spread widening but was offset by a small overweight in the supranationals, sovereigns and agency (SSA) sector
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-lm-mc-tactical-allocation-3.pdfMay, 2021
The Fund was up 0.67% (net of fees) while the benchmark gained 1.32% in May. The Funds relative underperformance was driven by the underweight to Australian Equity as the sector returned 2.34% (as measured by the S&P/ASX 200 Accumulation Index). During May, the allocations within the Fund remained largely unchanged. At the end of May, Australian Fixed Income is the largest allocation within the Fund (75%), with the balance split across Australian Equities (13%) and Cash (12%).
The Australian equity market rose 2.3% in May (as measured by the S&P/ASX 200 Accumulation Index), supported by a stimulatory Federal Budget and elevated commodity prices. Large cap and Value style stocks outperformed during the month, while high-yield and small cap stocks lagged. At the sector level, banks were the best performer due to a robust May 2021 bank reporting season, during which the majors showed flat to positive revenue growth, costs flat to down, and large bad debt provision write-backs. Consumer discretionary was also strong. Information technology was the weakest sector, weighted down by the prospect of higher inflation and interest rates. The Bloomberg Ausbond Composite Index returned 0.27% in May. Domestically, the federal budget included a substantial expansion of the budget in support of the recovery, including extensions of some existing business programs such as full expensing of depreciable assets and loss carry back provisions, in addition to personal income tax cuts. Primary issuance in the corporate and asset-backed security (ABS) sectors was light relative to recent months, with A$1.67
billion issued by banks and non-bank financials, while only A$1.5 billion of asset-backed securities were issued (which included an inaugural consumer receivable deal from WISR Freedom Trust). Spreads continued to grind tighter on corporate and ABS sectors but wound out a little on Semi government as well as supranational, sovereign and agency (SSA) sectors due to swap spreads widening versus government bonds. The Australian Dollar Trade-Weighted Index depreciated in May. The Australian dollar underperformed most of the major currencies apart from the US dollar and Japanese yen as export prices eased a little from recent highs, though they remain elevated.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-lm-mc-tactical-allocation-2.pdfApril, 2021
The Fund was up 0.60% (net of fees) while the benchmark gained 2.02% in April. The Fund’s relative underperformance was driven by the underweight to Australian Equity as the sector returned a solid 3.47% (as measured by the S&P/ASX 200 Accumulation Index), buoyed by better-than-expected employment data and rising commodity prices. During April, the allocation to Australian Fixed Income has been trimmed and the Fund’s tactical allocation is currently weighted towards Australian Fixed Income (73%), with the balance split across Australian Equities (13%) and Cash (14%).
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-lm-mc-tactical-allocation-1.pdfDecember, 2020
The Fund was down –0.2% (net of fees) while the Benchmark rose 0.4% for December. The Fund rose 5.1% for the December quarter while the Benchmark rose 6.5%. The Fund’s tactical allocation is currently weighted towards Australian Fixed Income (61%), with the balance split across Australian Equities (17%) and Cash (22%).
The Australian equity market rose 1.2% in December (as measured by the S&P/ASX 200 Accumulation Index). At the sector level, metals & mining was the best performer, with a range of commodities performing well on China’s demand recovery, benefiting the likes of Rio Tinto and BHP Group. Iron ore prices were particularly strong, driven by Chinese demand as well as supply issues with Brazil’s Vale downgrading its production guidance for 2021, leading to concerns that supply could be constrained at a time when demand is robust. Information technology was also a strong performer over the month. Utilities were the weakest sector during the month, dragged down by AGL Energy after the company downgraded its earnings guidance for FY21 following an incident at its Liddell Power Station.
The Australian fixed interest market (as measured by the Bloomberg Ausbond Composite Index) which fell -0.27%, as yields rose further in December. The Fund was up 0.30% over the final quarter of 2020, ahead of the Benchmark which fell -0.10%. The corporate sector, as the largest overweight in the Fund, continued to bring the most benefit through both carry and spread contraction. Small spread duration overweight's in supranational, sovereigns, and agencies (SSA) and covered bonds detracted as spreads widened and offset the benefit of spread tightening in the small overweight to the semi-government sector.
A small allocation to index-linked government bonds also contributed as investors priced in higher inflation due to the Reserve Bank of Australia (RBA) and other central banks switching to realised inflation in preference to forecast inflation as a guide for when to commence normalisation of policy. Interest-rate strategies were neutral over the month as a small overweight duration position was extended during December after yields rose and pared back again as yields retraced a little late in the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/fund-commentary-lm-mc-tactical-allocation.pdfticker: SSB0130AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://www.leggmason.com/en-au/products/lm-mc-tactical-allocation.html#shareclass=A&t=0,1,2&st=1
Literature -> Product Literature -> Fund Commentary
https://www.franklintempleton.com.au/our-products/funds-prices-performance/managed-funds/products/90036/AA1/martin-currie-tactical-allocation-fund/SSB0130AU
asset_class: Alternatives
asset_category: Alternative Miscellaneous
peer_benchmark: Alternatives - Misc Index
broad_market_index: Credit Suisse AllHedge Fund Index
structure: Managed Fund
manager_contact_details: Array
fund_features:
The Fund aims to earn an after-fee return in excess of the Benchmark over rolling five-year periods. The Benchmark is a composite of 50% the S&P/ASX 200 Accumulation Index and 50% the Bloomberg AusBond Composite Index. The Fund seeks to provide exposure to tactical asset allocation decisions between Australian equities, Australian bonds and cash based on an assessment of the relative valuations of these asset classes. The investment manager’s approach is premised on the philosophy that the Australian equity market is efficient over the long term but “short-term inefficient” – disciplined investors can exploit short-term market movements to add long-term value. The Fund is tilted toward the relatively undervalued asset class in the expectation that the undervalued asset class will outperform as it returns to assessed fair value.