May, 2023
After fees and expenses, the portfolio returned -1.03% (gross of fees return of -1%) in May which underperformed the benchmark return of -0.58% by 45bps. At the end of May, the Fund's equity weight was -0.3% underweight relative to the benchmark as we closed our directional underweight to equities at the end of the month.
Foreign currency exposure was at 18.1% with key underweights in CNH, NZD, USD and overweight in AUD, JPY, MXN, and BRL.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-19.pdfApril, 2023
After fees and expenses, the portfolio returned 0.95% (gross of fees return of 0.97%) in April which underperformed the benchmark return of 1.16% by 21bps. At the end of April, the Fund's equity weight was -2.2% underweight relative to the benchmark as we retained our directional underweight to equities throughout the month. Foreign currency exposure was at 17.7% with key underweights in USD, NZD, KRW and GBP and overweight in JPY, MXN, AUD, BRL and EUR.
File:March, 2023
After fees and expenses, the portfolio returned 1.48% (gross of fees return of 1.50%) in March which underperformed the benchmark return of 2.18% by 70bps. At the end of March, the Fund's equity weight was -1.6% underweight relative to the benchmark as we marginally increased the directional underweight to equities for downside protection, amid market turbulence brought by the negative news from financial sectors over the month.
Foreign currency exposure was at 18.8% with key underweights in USD, NZD, KRW and GBP and overweight in JPY, MXN, AUD, BRL and EUR.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-18.pdfFebruary, 2023
After fees and expenses, the portfolio returned -1.48% (gross of fees return of -1.45%) in February which underperformed the benchmark return of -1.22% by 26bps. At the end of February, the Fund's equity weight was -0.8% underweight relative to the benchmark as we retained a small underweight to equities in aggregate throughout the month.
Foreign currency exposure was at 16.3% with key underweights in USD, GBP, NZD, EUR and KRW and overweight in JPY, MXN, AUD, NOK and BRL.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-17.pdfJanuary, 2023
After fees and expenses, the portfolio returned 3.08% (gross of fees return of 3.10%) in January which underperformed the benchmark return of 3.65% by 57bps. At the end of January, the Fund's equity weight was -1.0% underweight relative to the benchmark as we retained a small underweight to aggregate equities at beginning of the month. Within equities, we retained our regional preference for the UK given its defensive value exposures, however the magnitude of overweight was reduced during the month as we saw incremental signals skewed towards a cyclical style.
At the same time, we brought Europe ex-UK equities to neutral from underweight, given better-than-expected macro data showing a more resilient economy and market in the Euro zone. We further added to our overweight position in China and emerging market equities as our convictions strengthened. We opened a cyclical trade to overweight US small cap against US large cap as a diversifier to the portfolio. US equities remained the largest underweight position in the portfolio in terms of regional allocation. From an equity sector perspective, we retained our preference for defensive sectors such as healthcare, although size of the overweight was trimmed during the month. We also liked our position in energy equities and maintained exposure in broad commodities over the month.
At the end of January, we had a marginal overweight in aggregate duration. We retained our preference for Canadian and Australian durations relative to the US on potentially diverging pace of rate hikes. We retained our overweight position in US IG credit and underweight in the 5-year point of the US treasury yield curve. We like the attractive yield pickup for the former trade while the latter reflected our bet on the steepening of this part of the curve. We opened a new trade to overweight Italian against German duration as we see relative opportunities without taking credit risks.
We also bought emerging market bonds in during January as we saw a more favourable environment for this asset class amid a slowdown in rate hikes and a potential weakening dollar. Foreign currency exposure was at 17.7% with key underweights in USD, GBP, NZD and EUR and overweight in JPY, MXN, AUD, NOK and BRL. We closed our underweight position in PHP during January as we became more constructive on emerging markets. At the same time, we reduced overweight in BRL to fund purchase of MXN.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-16.pdfDecember, 2022
After fees and expenses, the portfolio returned -2.45% (gross of fees return of -2.42%) in December which outperformed the benchmark return of -2.91% by 46bps. At the end of December, the Fund's equity weight was -1.4% underweight relative to the benchmark as we opened a small underweight to aggregate equities at beginning of the month. We retained our regional preference for UK as we still favoured it for its mix of defensive and commodity characteristics to allow it to serve as an attractive hedge in the late cycle environment with higher real rates.
At the same time, we kept underweight to Europe ex UK and US equities over the month. We added to overweight Japan equities in early December given its positive earnings prospects. We also added to China equities and bought broad emerging market equities back to neutral and then overweight as our convictions strengthened. We reduced our overweight to Brazil equities in early December, and further closed the position in the middle of the month amidst uncertainty from political risk. From an equity sector perspective, we retained our preference for defensive sectors such as healthcare equities. We closed our position in world minimum volatility. We added slightly to our position in energy equities in early December following the recent sell off, and we also maintained exposure in broad commodities over the month. At the end of December, we remained an aggregate neutral duration. We retained our preference to Canada and Australia duration relative to the US on potentially diverging pace of rate hikes. We opened a new position in short-term US IG credit in mid December, given its attractive yield pick up potential. At the same time, we opened underweight to the 5 year point of the US treasury yield curve, which also reflected our bet on steepening in this part of the curve, which is highly inverted at the current time.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-15.pdfNovember, 2022
After fees and expenses, the portfolio returned 2.40% (gross of fees return of 2.42%) in November which underperformed the benchmark return of 3.61% by 121bps. At the end of November, the Fund's equity weight was 0.3% overweight relative to the benchmark as we retained our neutral view towards equity over the month. We retained our regional preference for UK as we still favoured UK for its mix of defensive and commodity characteristics to allow it to serve as an attractive hedge in the late cycle environment with higher real rates.
At the same time, we kept underweight to Europe ex UK over the month. We opened an overweight Brazil equities early in the month, funded out of broad EM equities. From an equity sector perspective, we retained our preference for defensive sectors such as healthcare equities, as well as world minimum volatility. We closed our overweight to IT equities as we see less favorable signals from demand slowdown and declining earnings. We also retained preference for energy equities and maintained exposure in broad commodities over the month. At the end of November, we tilted slightly underweight in aggregate duration positioning. We added to Canada and Australia duration against an underweight to US duration at early November as we would like to benefit from the potential opportunity brought by the diverging pace of rate hikes. We retained our underweight to European duration over the month. Foreign currency exposure was at 18.5% with key underweights in NZD, PHP, EUR and CNY and overweight in MXN, NOK, BRL and JPY. We added to our overweight to BRL at early November funded out of USD. We took partial profits on our overweight USD against Asian cyclical currencies as well as PHP at the second week of the month, and further neutralized our USD position by closing our TWD underweight, moderating our CNY underweight, and selling NZD in the middle of November.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-14.pdfOctober, 2022
After fees and expenses, the portfolio returned 2.86% (gross of fees return of 2.89%) in October which underperformed the benchmark return of 2.99% by 13bps. At the end of October, the Fund's equity weight was 0.1% overweight relative to the benchmark as we retained our neutral view towards equity over the month. We retained our regional preference for UK while reduced its size at month end. Nevertheless, we still favoured UK for its mix of defensive and commodity characteristics to allow it to serve as an attractive hedge in the late cycle environment with higher real rates. At the same time, we kept underweight to Europe ex UK over the month. We closed our overweight position in China after the latest National People Congress in end October, amid a higher level of volatility brought by the uncertainty on policymaking in the near term. From an equity sector perspective, we retained our preference for defensive sectors such as healthcare equities. We kept our overweight to IT equities for diversification benefits, while reduced our position to world minimum volatility towards the month end.
We also retained preference for energy equities, and maintained exposure in broad commodities over the month. At the end of October, we held an underweight tilt in aggregate duration positioning. We closed the pair trade of underweight UK Gilts and overweight German bunds in mid October as we see more stabilization in the UK rates and FX market. We opened an overweight to Canada and Australia duration against an underweight to US duration at month end as we see potential opportunity brought by the diverging pace of rate hikes. We retained our underweight to European duration over the month. Foreign currency exposure was at 19.8% with key underweights in PHP, CNY, TWD, KRW and NZD and overweight in USD, MXN, NOK, BRL and JPY. We closed our underweight to GBP and reduced the scale of underweight to NZD, funded out of closing our overweight to AUD and reducing overweight to EUR towards the end of the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-13.pdfSeptember, 2022
After fees and expenses, the portfolio returned -3.77% (gross of fees return of -3.75%) in September which outperformed the benchmark return of -4.29% by 52bps. At the end of September, the Fund's equity weight was -0.2% underweight relative to the benchmark as we retained our neutral view towards equity over the month. We kept our regional preference for UK as we favoured its defensive nature against current volatile market backdrop as well as our modest overweight to China and underweight to Europe over the month. From an equity sector perspective, we reduced our position in the IT sector in mid-September in the face of shortterm headwinds, while adding to world minimum volatility and healthcare sector at the same time. We retained our preference for energy equities and commodities.
At the end of September, we held a neutral duration position, after decreasing aggregate duration in the middle of the month by reducing EUR and USD duration. We opened an underweight to UK Gilts and overweight to German bunds trade in mid-September amidst the Gilts sell off. We further added to this relative value trade over the month and took partial profits towards the month end given large moves in the market.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-12.pdfAugust, 2022
After fees and expenses, the portfolio returned -1.77% (gross of fees return of -1.74%) in August which underperformed the benchmark return of -1.73% by 4bps. At the end of August, the Fund's equity weight was 0.4% overweight relative to the benchmark as we brought equity to approximately neutral in the middle of the month. We retained our regional preference for UK and turned modestly overweight to US, while reduced our overweight position to China at the beginning of the month given higher anticipated sensitivity to geopolitical flash points. We remained underweight to Europe over the month. From an equity sector perspective, we opened a position in World IT at the beginning of the month to diversify the sources of interest rate sensitivity in the portfolio, funded partly out of world minimum volatility. We retain our preference for healthcare and energy equities and further reduced our overweight position in commodities in the face of short-term headwinds.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-11.pdfJuly, 2022
After fees and expenses, the portfolio returned 3.01% (gross of fees return of 3.03%) in July which underperformed the benchmark return of 4.19% by 118bps. At the end of July, the Fund's equity weight was -2.0% underweight relative to the benchmark as we remained our directional underweight to equity over the month. We retained our regional preference for China and UK as well as underweight to Europe and the US, while closed our overweight to Australia at the end of the month. We closed the trade of overweight European Banks and US equal weight in the middle of the month. We opened the trade of world minimum volatility in mid July, while reduced the scale coming to the end of the month.
From an equity sector perspective, we further added to our overweight healthcare position in mid July given its defensive nature and relatively attractive valuation. We closed our overweight to agriculture equity position at the end of the month considering the potential for supply shock easing, while we maintained our preference for energy equities. We reduced our overweight position in commodities in the face of shortterm headwinds. We continue to remain slightly underweight duration at the end of July. We maintained our underweight position to European duration, and neutral position in developed market duration including Australia. We closed the overweight position to Asia high yield hard currency in mid July. Foreign currency exposure was at 17.7% with key underweights in CNY, PHP, TWD, NZD, KRW and GBP and overweight in USD, NOK, AUD and MXN. We closed the overweight position to BRL and CLP funded out of USD in mid July, and added to MXN at the end of the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-10.pdfMay, 2022
After fees and expenses, the portfolio return of -0.73% (gross of fees return of -0.71%) in May, outperformed the benchmark return of -0.81% by 8bps. At the end of May, the Fund's equity weight was -1.5% underweight relative to the benchmark as we made various tactical adjustments to our relative value trades over the month. We retained our regional preference for UK and Australia, as well as underweight to Europe and US. We closed the long world financials equity position and added to our pro-cyclical positions such as European banks and US equal weight trades. We also added to the energy sector and agriculture equities, reflecting our current relative preference for the commodity complex. Amid the backdrop of rate hikes and inflation, we have reduced our long gold position in favor of broad commodities.
We continue to remain slightly underweight duration at the end of May. We maintained our underweight position to European duration, and neutral position in developed market duration including Australia. We also continue to hold a small overweight to Asia high yield hard currency funded out of US Treasuries.
Foreign currency exposure was at 17.1% with key underweights in CNY, PHP, TWD, CHF, KRW and GBP and overweight in USD, BRL, CLP, MXN and AUD. We closed underweight positions in EUR over the month and moderated our underweight in GBP. We also added to existing positions in MXN and BRL funded out of USD at the end of the month.
March, 2022
After fees and expenses, the portfolio return of 0.30% (gross of fees return of 0.32%) in March, outperformed the benchmark return of 0% by 30bps. At the end of March, the Fund's equity weight was 1.1% overweight relative to the benchmark as we further neutralized our directional equity risk and made various tactical adjustments to our relative value trades over the month. We retained our regional preference for UK which we added to over the month and closed our overweight to China and Japan equities.
Our outlook for stocks over the next 12 months is neutral. We believe global stocks are closer to the top than the bottom of their near term range. We prefer relative value opportunities that have strong structural upside, undervalued cyclicals that have price in too much of growth deceleration and higher quality and defensive segments that we expect to continue to post robust profit growth if activity moderates but remains above-trend. The risks to long term bond yields are well-balanced after the markets have priced in aggressive central bank tightening over the coming year. We expect real rates to rise as inflation peaks and the Federal Reserve tightens policy even more in the coming months, but for this to be offset by decrease in market based measures of inflation compensation.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-8.pdfJanuary, 2022
After fees and expenses, the portfolio return of -2.71% (gross of fees return of -2.68%) in January was broadly in line with the benchmark return of -2.72%. At the end of January, the Fund's equity weight was 4.2% overweight relative to the benchmark.
We retained our overweight positions in the UK, Europe, Japan and US equities as well as an underweight to Australia and EM equities (excluding China). We maintained our relative value trades such as long European banks versus European equities and US equal weight versus US equities. We also retained our sector preference for global financial, healthcare and energy equities, while also maintaining our long position in commodities.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-7.pdfDecember, 2021
After fees and expenses, the portfolio return of 1.40% (gross of fees return of 1.42%) in December outperformed the benchmark return of 1.11% by 29bps. At the end of December, the Fund's equity weight was 3.3% overweight relative to the benchmark.
We maintained our pro-cyclical relative value trades such as long European banks versus European equities, US equal weight versus US equities as well as an overweight to US small cap equities. We also maintained our preference for long global financial, healthcare and energy equity. From a regional equity perspective, we increased our overweight to the US at the start of the month which was funded from our existing overweights in Europe and Japan, which were maintained but in smaller sizes. We maintained our overweight to UK over the month as well as our underweight to Australian and EM equities but neutralized China equities. We maintained our long position in commodities.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-6.pdfNovember, 2021
After fees and expenses, the portfolio return of 0.05% (gross of fees return of 0.07%) in November underperformed the benchmark return of 0.81% by 76bps. At the end of November, the Fund's equity weight was 5.1% overweight relative to the benchmark.
We maintained our pro-cyclical relative value trades such as long European banks versus European equities and moderated US equal weight versus US equities and initiated an overweight to US small cap equities. We also maintained our exposure to long global financial versus global equities and long global healthcare equity and opened a long energy versus world equity. From a regional equity perspective, we maintained our overweight to the UK, and Europe and reduced our overweight to Japan as well as our allocation to EM this month. We also reduced our underweight to Australian equities. We also initiated a long position in commodities.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-5.pdfOctober, 2021
After fees and expenses, the portfolio return of 0.15% (gross of fees return of 0.18%) in October underperformed the benchmark return of 0.28% by 13bps. At the end of October, the Fund's equity weight was 4.6% overweight relative to the benchmark.
We recalibrated our exposure to pro-cyclical relative value trades this month by partially taking profit on long European banks versus European equities and reintroducing US equal weight versus US equities. We maintained our exposure to long global financial versus global equities. We’ve reduced our exposure to long global healthcare equity at the end of the month and opened a long energy versus world equity. From a regional equity perspective, we maintained our overweight to the UK, Japan and Europe. Australian equities remained as our key regional equity underweight. Duration remained short relative to the benchmark over the month. We remained neutral in Australian duration and underweight to Europe, UK and Japan. We reduced our short duration exposure by buying back our existing underweight in US duration over the month. We closed the existing overweight to EM debt hard currency and opened long Asia high yield hard currency
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-1-1.pdfSeptember, 2021
After fees and expenses, the portfolio return of -1.71% (gross of fees return of -1.69%) in September outperformed the benchmark return of -1.91% by 20bps. At the end of September, the Fund's equity weight was 3.8% overweight relative to the benchmark.
We maintained our exposure to pro-cyclical relative value trades such as long European banks versus European equities and long global financial equities versus global equities as well long global healthcare equity which is a utility trade which helps to diversify our active trade set. We recalibrated our regional equity views as we trimmed our overweight in the UK, increased our overweight to Japan and retained our overweight to Europe and closed our overweight in Germany. US and Australian equities remained as our key regional equity underweights. We closed our tactical overweight to REITs.
Duration was kept short relative to the benchmark over the month. We remained broadly neutral in Australian duration and underweight to Europe, US, UK and Japan duration. We opened an overweight to EM debt hard currency this month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-4.pdfAugust, 2021
After fees and expenses, the portfolio return of 1.38% (gross of fees return of 1.41%) in August outperformed the benchmark return of 1.33% by 5bps. At the end of August, the Fund's equity weight was 2.6% overweight relative to the benchmark excluding opportunistic exposure to Global REITs.
We maintained our exposure to pro-cyclical relative value trades such as long European banks versus European equities and long global financial equities versus global equities. We added long Global Healthcare equity which should serve as a diversifier without materially diluting our existing high conviction positions.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-3.pdfJuly, 2021
After fees and expenses, the portfolio return of 0.83% (gross of fees return of 0.85%) in July underperformed the benchmark return of 1.41% by 58bps. At the end of July, the Fund's equity weight was 0.3% overweight relative to the benchmark relative to the benchmark excluding additional exposure to Global REITs.
We maintained our exposure to pro-cyclical relative value trades such as long European banks versus European equities and long global financial equities versus global equities. In terms of regional equity views, we continue to hold a preference for UK, Germany, Japan and Europe over the US and Australian equities. We remained overweight to Global REITs at the end of the month. Duration was kept short relative to the benchmark over the month. We remained broadly neutral in Australian and underweight to Europe, US, UK and Japan duration.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-2.pdfJune, 2021
After fees and expenses, the portfolio return of 1.27% (gross of fees return of 1.30%) in June underperformed the benchmark return of 1.78% by 51bps. At the end of June, the Fund's equity weight was 1.3% overweight relative to the benchmark.
We maintained our exposure to pro-cyclical relative value trades such as long European banks versus European equities and long global financial equities versus global equities, as well as a long US equal weighted index relative to the US market cap index. In terms of regional equity views, we continue to hold a preference for UK, Germany, Japan and Europe over the US and Australian equities. We also added to our existing overweight to Global REITs at the end of the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced-1.pdfDecember, 2020
After fees and expenses, the portfolio increased by 1.12% over the month, underperforming the benchmark return by 10bps. At the end of December, the Fund's equity weight was 3.7% overweight relative to the benchmark with a preference to be overweight emerging market versus developed market equities. We also hold a preference to value-oriented relative to growth-oriented equities and preference for US small caps over US large caps.
Tactical fixed income strategies included an overweight to emerging market hard currency debt, contributing a marginally overweight overall duration position. Duration from sovereign fixed income was approximately neutral with nominal yields anchored at low levels. Foreign currency exposure was at 22.2% with key underweights in USD, CAD and AUD and overweights in JPY, EUR, BRL and MXN. In December, the portfolio was rebalanced to implement a new and simplified benchmark structure, effective from 15th December 2020.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/ubs_tactical_beta_balanced.pdfasset_class: Multi-Asset
asset_category: 41-60% Growth Assets - Low-Cost Diversified
peer_benchmark: Multi-Asset - 41-60% Low-Cost Index
broad_market_index: Multi-Asset Balanced Investor Index
manager_contact_details: Array
ticker: UBS0041AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
fund_features:
UBS Tactical Beta Balanced aims to provide investors with a diversified Australian and global portfolio of both income and growth assets. The Fund seeks to provide investors with attractive returns over the long term through the construction of a diversified portfolio of income and growth assets, largely by investing in the UBS Tactical Beta Fund – Growth and the UBS – Tactical Beta Fund – Conservative or in exchange traded funds (ETFs), both onshore and offshore, index funds, cash funds and derivatives. The portfolio management team will tactically allocate between asset classes and currencies based on their relative attractiveness, managing the overall risk and return of the portfolio. Tactical asset allocation, along with the passive market return, or beta, are the sources of the Fund’s return.
structure: Managed Fund