FNArena’s Weekly Insights – June 29 2020

Lessons Learned From 5.5 Years All-Weather Portfolio

By Rudi Filapek-Vandyck, Editor FNArena

Excluding any unforeseen calamities with the June 30 finish line in sight, the FNArena-Vested Equities All-Weather Model Portfolio should finish financial year 2020 with a positive return of circa 4% and only a slight negative performance for those turbulent past six months.

This will be well-above the performance of the ASX200 Accumulation index over both periods, which remains deep in the negative on both accounts.

On my observation, most professional investors have found beating the index over the year past a tough challenge. In many cases the relative underperformance has now been stretched to 3-5 years, which is a long time in today’s 24 hours news cycle-driven world.

5.5 Years ago, the All-Weather Portfolio started off on the promise of an average total investment return of 7-8% and it is pleasing to note that, three mini-bear markets down the track, total return is keeping up with that promise.

For many investors, 7-8% on average over time may not sound like an extremely attractive proposition, but when the industry numbers will be released post FY20, many achieved returns over the past five years will be noticeably slimmer.

This is the point where I could pump up my chest and tell you all how fantastic my skills are in reading market sentiment and trends, but the opposite is likely more accurate.

Click to read the Full Report