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.
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.
What is UBS Tactical Beta Balanced UBS Tactical Beta Balanced is an Managed Funds investment product that is benchmarked against Multi-Asset Balanced Investor Index and sits inside the Multi-Asset - 41-60% Low-Cost 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 UBS Tactical Beta Balanced has Assets Under Management of 164.91 M with a management fee of 0.29%, a performance fee of 0.00% and a buy/sell spread fee of 0.1%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the UBS Tactical Beta Balanced has returned 1.44% in the last month. The previous three years have returned 3% annualised and 6.86% each year since inception, which is when the UBS Tactical Beta Balanced 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 UBS Tactical Beta Balanced first started, the Sharpe ratio is 0.57 with an annualised volatility of 6.86%. The maximum drawdown of the investment product in the last 12 months is -5.47% and -13.57% 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 UBS Tactical Beta Balanced has a 12-month excess return when compared to the Multi-Asset - 41-60% Low-Cost Index of -2.58% and -0.88% 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. UBS Tactical Beta Balanced has produced Alpha over the Multi-Asset - 41-60% Low-Cost Index of -0.19% in the last 12 months and -0.1% since inception.
What are similar investment products?
For a full list of investment products in the Multi-Asset - 41-60% Low-Cost Index category, you can click here for the Peer Investment Report.
What level of diversification will UBS Tactical Beta Balanced provide?
UBS Tactical Beta Balanced has a correlation coefficient of 0.97 and a beta of 0.92 when compared to the Multi-Asset - 41-60% Low-Cost 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 UBS Tactical Beta Balanced and its peer investments, you can click here for the Peer Investment Report.
How do I compare the UBS Tactical Beta Balanced with the Multi-Asset Balanced Investor Index?
For a full quantitative report on UBS Tactical Beta Balanced compared to the Multi-Asset Balanced Investor Index, you can click here.
Can I sort and compare the UBS Tactical Beta Balanced to do my own analysis?
To sort and compare the UBS Tactical Beta Balanced financial metrics, please refer to the table above.
Has the UBS Tactical Beta Balanced 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 UBS Tactical Beta Balanced?
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Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the UBS Tactical Beta Balanced. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - April 30, 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.
Performance Commentary - March 31, 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.
Performance Commentary - February 28, 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.
Performance Commentary - January 31, 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.
Performance Commentary - December 31, 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.
Performance Commentary - November 30, 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.
Performance Commentary - October 31, 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.
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