Russell Investments Portfolio Series – Balanced is an Managed Funds investment product that is benchmarked against Multi-Asset Growth Investor Index and sits inside the Multi-Asset - 61-80% Multi-Manager 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 Russell Investments Portfolio Series – Balanced has Assets Under Management of 84.28 M with a management fee of 0.75%, a performance fee of 0 and a buy/sell spread fee of 0.35%.
The recent investment performance of the investment product shows that the Russell Investments Portfolio Series – Balanced has returned 1.08% in the last month. The previous three years have returned 3.72% annualised and 8.62% each year since inception, which is when the Russell Investments Portfolio Series – Balanced first started.
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 Russell Investments Portfolio Series – Balanced first started, the Sharpe ratio is NA with an annualised volatility of 8.62%. The maximum drawdown of the investment product in the last 12 months is -5.79% and -35.68% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
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 Russell Investments Portfolio Series – Balanced has a 12-month excess return when compared to the Multi-Asset - 61-80% Multi-Manager Index of -1.08% and 0.17% since inception.
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. Russell Investments Portfolio Series – Balanced has produced Alpha over the Multi-Asset - 61-80% Multi-Manager Index of NA% in the last 12 months and NA% since inception.
For a full list of investment products in the Multi-Asset - 61-80% Multi-Manager Index category, you can click here for the Peer Investment Report.
Russell Investments Portfolio Series – Balanced has a correlation coefficient of 0.99 and a beta of 1.13 when compared to the Multi-Asset - 61-80% Multi-Manager 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.
For a full quantitative report on Russell Investments Portfolio Series – Balanced and its peer investments, you can click here for the Peer Investment Report.
For a full quantitative report on Russell Investments Portfolio Series – Balanced compared to the Multi-Asset Growth Investor Index, you can click here.
To sort and compare the Russell Investments Portfolio Series – Balanced financial metrics, please refer to the table above.
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The Portfolio typically invests in a diversified investment mix with exposure to growth investments of around 70% and defensive investments of around 30% over the long term, however the allocations will be actively managed within the allowable ranges depending on market conditions.’
Global share markets made strong gains over the period, driven largely by expectations the US Federal Reserve (Fed) would soon hit the pause button on interest rates amid increasing evidence inflation in the world’s biggest economy had peaked and renewed concerns over the US banking system. Headline inflation in the US continued to ease throughout January and February, suggesting inflation peaked at 9.1% in June last year. We also saw several US midsize banks collapse and Swiss banking giant UBS acquire troubled country peer Credit Suisse. Fears of a more systemic banking crisis, together with the ongoing moderation in inflation, led to increased speculation the Fed would leave interest rates on hold at its 21-22 March meeting; though the Bank ultimately disappointed investors by lifting the fed funds rate a further 0.25% to a target range of between 4.75% and 5.00%. Elsewhere, both the European Central Bank and the Bank of England raised interest rates twice over the period, as was widely expected. Australian shares underperformed their global counterparts; though the local market did record good gains for the quarter.
The direct Australian equity portfolio underperformed the benchmark. A modest underweight to the strong-performing utilities space detracted from returns. Stock selection within the materials and energy sectors also weighed on performance, including overweights to Ampol and James Hardie. Partly offsetting these positions was a nil exposure to Pilbara Minerals, which fell sharply over the period. Stock selection within the financials space also added value; notably an overweight to Suncorp Group.
During the month, we used derivatives to add some downside protection to the dynamic real return core strategy. Overall, the portfolio is aligned with its long-term asset allocation as we wait patiently for opportunities in this volatile environment. Global share markets fell in August. Stocks actually began the month well as investors adjusted their US rate hike expectations in the wake of better-thanexpected inflation data. However, comments from several US Federal Reserve (Fed) officials – all of whom reiterated the central bank’s determination to do what is necessary to control inflation – saw share markets reverse direction midway through the month. Stocks were also pressured by some surprisingly hawkish rhetoric from Fed chairman Jerome Powell, who reaffirmed his bank’s commitment to maintaining its current pace of rate hikes and cautioned against easing monetary conditions too early. Meanwhile, sharply higher inflation in the UK and Europe raised the prospect of even more aggressive rate hikes from the Bank of England and the European Central Bank. Stocks were also impacted by the ongoing uncertainty stemming from the war in Ukraine, heightened Sino-US frictions and fresh Chinese growth concerns. Australian shares rose as investors looked past yet another domestic rate hike and bet instead that the Reserve Bank of Australia may need to slow the pace at which it tightens monetary policy if growth slows too quickly. Government bonds were weaker, with longer-term yields rising amid expectations of further interest rate hikes globally.
The Portfolio typically invests in a diversified investment mix with exposure to growth investments of around 70% and defensive investments of around 30% over the long term, however the allocations will be actively managed within the allowable ranges depending on market conditions.
Global share markets fell sharply in the June quarter, driven by concerns that more aggressive central bank action in the face of persistently high inflation could derail the global recovery. In the US, consumer prices climbed a further 1.0% in May to be 8.6% higher for the year; the largest annual reading since December 1981. In response, the US Federal Reserve raised interest rates a further 0.75% midway through June. The move followed a 0.50% increase in early May and sparked fears that higher and faster rate hikes could tip the world’s largest economy (and potentially the global economy) into recession. Australian shares underperformed their global counterparts after the Reserve Bank of Australia raised interest rates in response to a further spike in inflation; the Bank lifting the official cash rate twice over the period to 0.85%.
Contributing positively to performance were strong absolute returns from our global equity portfolio, including the Russell Investments Tax Effective Global Shares Fund and the Russell Investments Multi-Asset Factor Exposure Fund. However, both funds narrowly underperformed their benchmarks over the period.
This was due largely to their value exposure, as investors tended to favour quality and growth names over more cyclical, cheaper value stocks. It was a similar theme within our Australian equity portfolio, with the Russell Investments Australian Shares Core Fund, the Russell Investments Australian Opportunities Fund and the Russell Investments Australian Factor Exposure Fund all recording strong absolute returns for the quarter but underperforming their benchmarks. The Fund’s credit exposure also added value over the period, including global floating rate credit and global high-yield debt.
Our exposure to the Russell Investments Emerging Market Debt Local Currency Fund was also positive, as were our exposures to bank loans and securitised assets. Within our fixed income portfolio, both the Russell Investments International Bond Fund – $A Hedged and the Russell Investments Australian Bond Fund recorded positive absolute and excess returns for the quarter. The two funds benefited largely from their overweight to credit. An overweight to global listed property, which outperformed the broader global equity market over the period, added further value.
The Fund’s global and domestic fixed income portfolios contributed positively to performance, with the Russell Investments International Bond Fund (AUD Hedged) and the Russell Investments Australian Bond Fund recording positive absolute and benchmarkrelative returns for the month. Both funds benefited from their credit exposures.
Our overweight to extended fixed income assets also added value; notably our exposure to global floating rate credit, which outperformed amid improving investor sentiment and tighter credit spreads. Metrics Credit was also positive for the month. In contrast, our global and Australian equity portfolios were mixed in April. In terms of global equities, the Russell Investments Tax Effective Global Shares Fund (TEGS) recorded strong absolute returns over the period but underperformed its benchmark. TEGS was impacted in part by its pro-cyclical bias as investors tended to favour growth-oriented names over more cyclical, cheaper value stocks. The Russell Investments Multi-Asset Factor Exposure Fund and the Russell Investments Global Opportunities Fund (AUD Hedged) performed in line with their respective benchmarks in April; though, like TEGS, they did deliver strong absolute returns.
The Fund’s global and domestic equity portfolios contributed positively to performance over the period. In terms of global equities, both the Russell Investments Tax Effective Global Shares Fund and the Russell Investments Global Opportunities Fund delivered positive excess returns for the quarter, driven by strong performances from their emerging markets and UK equity specialists. The Russell Investments Multi-Asset Factor Exposure Fund also performed well, benefiting largely from its value exposure. Within our Australian equity portfolio, both the Russell Investments Australian Shares Core Fund and the Russell Investments Australian Factor Exposure Fund recorded strong absolute and benchmark relative returns over the period.
The Fund’s credit exposure was also positive for the quarter; notably global high-yield debt and floating rate credit, which recorded good gains as bank loans and securitised assets continued to recover. Credit positioning also contributed to positive excess returns for the Russell Investments International Bond Fund – $A Hedged and the Russell Investments Australian Bond Fund. Also adding value over the period were our exposures to global and Australian listed property and an overweight to the Japanese yen. In contrast, a stronger Australian dollar impacted the returns of the Fund’s assets denominated in foreign currency.
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