Australian Ethical Balanced Fund (Wholesale) aims to provide investors with a balance between capital growth and a moderate level of income through a diversified portfolio of assets that supports the Australian Ethical Charter. The opportunity to invest in a diversified portfolio of asset types and markets to reduce the volatility of returns. Asset classes include, but are not limited to, Australian and international shares, property and fixed income securities.
Whilst the quarter was challenging across most major asset classes in the Fund, both absolute and relative performance was driven by our international equities portfolio, which fell 2.3% against its MSCI World Index ex AU benchmark, which returned 0.3%. This was partially offset by positive absolute and relative performance in our domestic equities portfolio, rising 1.3% against the benchmark (the S&P/ASX 200) which grew by 0.4%.
Both the absolute and relative performance was driven by our international equities portfolio. After starting the quarter off strongly, with the MSCI World ex AU index rising 12.2% by mid-August, global markets began to sell off as the release of CPI data in the US showed inflation of 9.1% exceeding expectations by 0.3%. Markets continued to sell-off through to the end of September. In local currency terms, the global index fell 4.4%, however our unhedged currency exposure cushioned returns as the AUD fell from US$0.69 to US$0.64, resulting in an unhedged return of 0.3% for the benchmark and -2.3% for our portfolio.
The Industrials sector within our international equities portfolio was one of the few sectors that made a meaningful contribution to relative performance, as well as being the largest contributor to absolute performance, rising 3.5% against the benchmark’s 1.1%.
What is Australian Ethical Balanced Fund (Wholesale) Australian Ethical Balanced Fund (Wholesale) is an Managed Funds investment product that is benchmarked against Multi-Asset Growth Investor Index and sits inside the Multi-Asset - 61-80% Diversified Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Australian Ethical Balanced Fund (Wholesale) has Assets Under Management of 544.74 M with a management fee of 0.94%, a performance fee of 0.00% and a buy/sell spread fee of 0.05%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Australian Ethical Balanced Fund (Wholesale) has returned 0.82% in the last month. The previous three years have returned 3.72% annualised and 8.33% each year since inception, which is when the Australian Ethical Balanced Fund (Wholesale) first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Australian Ethical Balanced Fund (Wholesale) first started, the Sharpe ratio is NA with an annualised volatility of 8.33%. The maximum drawdown of the investment product in the last 12 months is -2.88% and -12.24% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Australian Ethical Balanced Fund (Wholesale) has a 12-month excess return when compared to the Multi-Asset - 61-80% Diversified Index of -2.09% and 0.96% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Australian Ethical Balanced Fund (Wholesale) has produced Alpha over the Multi-Asset - 61-80% Diversified Index of NA% in the last 12 months and NA% since inception.
What are similar investment products?
For a full list of investment products in the Multi-Asset - 61-80% Diversified Index category, you can click here for the Peer Investment Report.
What level of diversification will Australian Ethical Balanced Fund (Wholesale) provide?
Australian Ethical Balanced Fund (Wholesale) has a correlation coefficient of 0.96 and a beta of 0.95 when compared to the Multi-Asset - 61-80% Diversified Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Australian Ethical Balanced Fund (Wholesale) and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Australian Ethical Balanced Fund (Wholesale) with the Multi-Asset Growth Investor Index?
For a full quantitative report on Australian Ethical Balanced Fund (Wholesale) compared to the Multi-Asset Growth Investor Index, you can click here.
Can I sort and compare the Australian Ethical Balanced Fund (Wholesale) to do my own analysis?
To sort and compare the Australian Ethical Balanced Fund (Wholesale) financial metrics, please refer to the table above.
Has the Australian Ethical Balanced Fund (Wholesale) been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Australian Ethical Balanced Fund (Wholesale)?
If you or your self managed super fund would like to invest in the Australian Ethical Balanced Fund (Wholesale) please contact Level 8, 130 Pitt Street. Sydney NSW 2000 via phone 1800 021 227 or via email enquiries@australianethical.com.au.
How do I get in contact with the Australian Ethical Balanced Fund (Wholesale)?
If you would like to get in contact with the Australian Ethical Balanced Fund (Wholesale) manager, please call 1800 021 227.
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Australian Ethical Balanced Fund (Wholesale). All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - September 30, 2022 Whilst the quarter was challenging across most major asset classes in the Fund, both absolute and relative performance was driven by our international equities portfolio, which fell 2.3% against its MSCI World Index ex AU benchmark, which returned 0.3%. This was partially offset by positive absolute and relative performance in our domestic equities portfolio, rising 1.3% against the benchmark (the S&P/ASX 200) which grew by 0.4%.
Both the absolute and relative performance was driven by our international equities portfolio. After starting the quarter off strongly, with the MSCI World ex AU index rising 12.2% by mid-August, global markets began to sell off as the release of CPI data in the US showed inflation of 9.1% exceeding expectations by 0.3%. Markets continued to sell-off through to the end of September. In local currency terms, the global index fell 4.4%, however our unhedged currency exposure cushioned returns as the AUD fell from US$0.69 to US$0.64, resulting in an unhedged return of 0.3% for the benchmark and -2.3% for our portfolio.
The Industrials sector within our international equities portfolio was one of the few sectors that made a meaningful contribution to relative performance, as well as being the largest contributor to absolute performance, rising 3.5% against the benchmark’s 1.1%.
The largest detractor to both relative and absolute performance was in the Communication Services sector within the international equities portfolio, due to both underperformance and an overweight position. The sector returned -11.5% to the portfolio, against the benchmark return of -6.7%. Alphabet’s decline of 6.1% was the largest detractor within the sector due to its significant weighting in the portfolio.
Performance Commentary - June 30, 2021 Global markets posted another strong quarter with the MSCI World Index appreciating 7.7%. This was driven by the US where the S&P 500 rose 8.6%, and closely followed by Europe (MSCI Europe ex UK) which rose 7.1%. Australia kept pace, the ASX 200 was up 8.3% driven by cyclicals. In Asia performance was subdued relative to other regions; including the Nikkei which was down 1.2%. Performance in global equity markets was driven by improved economic activity, the roll out of the vaccination program and strong monetary and fiscal support. This improved economic activity was reflected in a rising Purchasing Managers’ Index. Unemployment rates have fallen faster than anticipated, and YoY inflation rates have continued to rise – prompting investors to pay close attention to how Central Banks will react. However, despite the inflation concerns bond yields fell over the quarter with questions remaining around whether the rise in inflation will be sustained.
The Balanced Fund returned 5.7% (Wholesale class: 5.9%) over the quarter, driven by the equity’s portfolio. The Domestic Equities holdings were the largest contributor to performance, returning 10% against its benchmark, the S&P ASX 200, which returned 8.3%. Materials led the outperformance where the portfolios lithium holdings, Pilbara Minerals and Orocobre, appreciated 38.8% and 35.9% respectively. The portfolio’s overweight to the Information Technology sector was another strong contributor to outperformance, returning 13.7% against the benchmark return of 12.1%.
Performance Commentary - December 31, 2020 The December quarter was a strong quarter for equity markets, with most major markets rising over 10%. The MSCI World rose 12.5% over the 3-month period. This was largely driven by the S&P 500, which rose 12.1%, however most major markets saw similar returns, including the S&P/ASX 200 up 13.7%, the FTSE 100 up 10.9%, the MSCI Europe ex UK up 10.2% and MSCI Asia rising 14.9%. Progress on the development of a COVID-19 vaccine, Biden’s election victory and the anticipation of further fiscal stimulus were the main drivers of investor optimism. The Balanced Fund returned 7.9% (Wholesale Fund 8.2%) over the 3-month period, outperforming its benchmark by 1.7% (2.0% Wholesale Fund). The Fund’s Domestic Equities portfolio was the main driver of performance, returning 18.6% against its benchmark return of 13.7%. Financials were a significant contributor to performance, with banks recovering strongly over the quarter. Materials also contributed, driven by Pilbara Minerals, which benefited from an improved outlook for the demand for lithium as electric carmakers ramp up production, driving the stock up 187%. The International Equities portfolio returned 7.4% against its benchmark return of 5.7%. Financials, Industrials and IT were the main contributors to performance.The Fund’s Property holdings returned 4.1%, outperforming its benchmark by 1.8%, as the portfolio’s healthcare exposure benefited from increased investor interest in the sector.Fixed Income had a slight negative return with bond yields ending the quarter slightly higher as the macro outlook improved.
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