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Global SharesQuarterly Performance Update: Q4 2015
Returns Relative to Benchmark
As of Date: 31/12/2015
3 month YTD 1 year 3 years Since Incp %p.a
0.0
5.0
10.0
15.0
20.0
25.0
1.5
9.9 9.9
16.6 16.1
1.4
9.8 9.8
21.2 20.7
Global Shares Managed Account MSCI ACWI NR Index
Retu
rn
Investment Growth of $10,000
Time Period: 1/07/2012 to 31/12/2015
12/2012 06/2013 12/2013 06/2014 12/2014 06/2015 12/20158,000.0
10,000.0
12,000.0
14,000.0
16,000.0
18,000.0
20,000.0
22,000.0
Global Shares Managed Account MSCI ACWI NR Index
Top Holdings
Weighting %
Ibbotson Core International Eqty H (SA)
iShares MSCI Japan (AU)
iShares MSCI Emerging Markets (AU)
Ibbotson Core International Eqty UH(SA)
iShares MSCI BRIC (AU)
iShares MSCI South Korea Capped (AU)
iShares MSCI Taiwan (AU)
Cash Account
31.7
25.7
16.8
10.3
7.3
3.2
3.2
1.8
Bianca RosePortfolio Manager+612 9276 [email protected]
Market Commentary
The December quarter proved to be an eventful period for financial markets as the Federal Reserve finally lifted U.S. interest rates by 0.25%, as expected, at their December meeting. This marks the first rise since 2006 and comes on the back of strong employment numbers, although the Fed is at pains to say that rates remain accommodative. By contrast, the European Central Bank under-delivered, failing to meet market expectations for greater stimulus measures, despite ongoing rhetoric to do “whatever it takes”.
China remained in focus given its deteriorating economic data, a volatile share market and the ongoing devaluation of the Yuan which was recently accepted into the IMF’s basket of currencies.
OPEC held a nonsensical meeting in December, which resulted in the effective removal of the production ceiling. This means that member nations are free to produce and sell as much oil as they want, into an already oversupplied market. The oversupply of the oil market may be further exacerbated by the looming return of Iranian production.
How the Portfolio Performed
The Global Shares portfolio delivered a return of 1.51%, for the quarter. This is a solid result in what was a challenging period for financial markets. Pleasingly, the portfolio delivered a solid return for the 12 months to 31 December 2015, being up 9.92%.
Global equities, for the most part, enjoyed a positive quarter. Developed world equities were particularly strong, especially Japan, which is a key overweight position in the portfolio. Emerging Market equities recorded a slightly negative return, in local currency terms, notwithstanding China having a positive quarter. Returns from global equities were, however, impacted by the effects of currency, with the Australian dollar appreciating significantly against all major peers, over the period. That said, in recognition of the currency getting closer to our fair value, we took the opportunity to increase the level of currency hedging in the portfolio, via the inclusion of the Ibbotson International Shares Core (Hedged) Trust, during October. This decision served us well.
Outlook
We continue to expect heightened volatility in markets as geopolitical and macroeconomic issues play out. In our view, having a valuation-driven dynamic asset allocation approach in this environment will be crucial to achieving investment objectives, over the longer term. Indeed, and even after the weakness across many asset classes in the previous two quarters, a number of key International equity markets, most notably United States equities, remain expensive, on our analysis (albeit they represent better value than before). That said, the portfolio remains nearly fully invested in global equity opportunities that we consider attractively priced.
THIS REPORT HAS BEEN PRODUCED USING PRESENTATION STUDIO, A MODULE OF MORNINGSTAR DIRECTThis document is issued by Ibbotson Associates Australia Limited (ABN 54 071 808 501, AFS Licence No. 228986) (‘Ibbotson’). Ibbotson is a member of the Morningstar group of companies (‘Morningstar’). © 2015 Morningstar, Inc. All rights reserved. In compiling this document, Ibbotson has relied on information and data supplied by Morningstar and other third party information providers. Whilst all reasonable care has been taken to ensure the accuracy of information provided, neither Ibbotson, Morningstar nor their third party information providers accept responsibility for any inaccuracy or for investment decisions or any other actions taken by any person on the basis or context of the information included. Any Morningstar ratings/recommendations contained in this report are based on the full research report available from Morningstar or your adviser. Past performance is not a reliable indicator of future performance. Neither Ibbotson nor Morningstar guarantees the performance of any investment or the return of capital. The information provided is general advice only has been prepared without reference to an individual person’s objectives, financial situation or particular needs. You should consider the advice in light of these matters and if applicable the relevant disclosure document before making any decision to invest. To obtain advice tailored to your situation, individuals should contact a professional financial adviser. For a copy of the relevant disclosure document, please contact our Distribution Team on 02 9276 4550. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782.
Global Shares Managed Account As of 31/12/2015
Rescaled Weight
Banks
Capital Goods
Automobiles and Components
Technology Hardware and Equipment
Materials
Telecommunication Services
Food, Beverage and Tobacco
Pharmaceuticals and Biotechnology
Software and Services
Insurance
Energy
Real Estate
Semiconductors and Semiconductor Equipment
Transportation
Diversified Financials
Utilities
Consumer Durables and Apparel
Retailing
Household and Personal Products
Food and Staples Retailing
Health Care Equipment and Services
Media
Commercial Services and Supplies
Consumer Services
0.0 2.0 4.0 6.0 8.0 10.0
9.4
6.3
6.2
6.0
4.2
4.1
3.3
3.3
3.2
3.0
3.0
2.5
2.4
2.3
2.1
2.0
2.0
1.4
1.3
1.2
0.9
0.9
0.5
0.4
Transactions in the Quarter
IJP-AU iShares MSCI Japan ETF CDI DecreasedINT0017AU International Shares Core (Unhedged) AddedINT0016AU International Shares Core (Hedged) AddedIEM-AU iShares MSCI Emerging Markets ETF Depository Interests DecreasedIEU-AU iShares Europe ETF Depository Interests RemovedIAA-AU iShares Asia 50 ETF CDI RemovedIVV-AU iShares Core S&P 500 ETF Depository Interests RemovedIBK-AU iShares MSCI BRIC ETF -CDI AddedITW-AU iShares Taiwan AddedIKO-AU iShares South Korea AddedMA_CASH Cash Account Decreased
Equity Sectors (GICS)
Portfolio Date: 31/12/2015
%Energy 3.8Materials 5.1Industrials 12.9Healthcare 11.4Consumer Discretionary 15.3Consumer Staples 11.2Financials 15.9Information Technology 17.4Telecom Services 5.2Utilities 1.9Total 100.0
Equity Region Exposure
Portfolio Date: 31/12/2015%
North America 23.7Latin America 3.5United Kingdom 2.4Africa/Middle East 2.8Europe dev 5.6Europe emrg 2.3Japan 31.0Asia dev 12.5Asia emrg 16.1Australasia 0.1Total 100.0
Asset Allocation
Portfolio Date: 31/12/2015
%
Equity 98.2
Cash 1.8
Total 100.0
THIS REPORT HAS BEEN PRODUCED USING PRESENTATION STUDIO, A MODULE OF MORNINGSTAR DIRECTThis document is issued by Ibbotson Associates Australia Limited (ABN 54 071 808 501, AFS Licence No. 228986) (‘Ibbotson’). Ibbotson is a member of the Morningstar group of companies (‘Morningstar’). © 2015 Morningstar, Inc. All rights reserved. In compiling this document, Ibbotson has relied on information and data supplied by Morningstar and other third party information providers. Whilst all reasonable care has been taken to ensure the accuracy of information provided, neither Ibbotson, Morningstar nor their third party information providers accept responsibility for any inaccuracy or for investment decisions or any other actions taken by any person on the basis or context of the information included. Any Morningstar ratings/recommendations contained in this report are based on the full research report available from Morningstar or your adviser. Past performance is not a reliable indicator of future performance. Neither Ibbotson nor Morningstar guarantees the performance of any investment or the return of capital. The information provided is general advice only has been prepared without reference to an individual person’s objectives, financial situation or particular needs. You should consider the advice in light of these matters and if applicable the relevant disclosure document before making any decision to invest. To obtain advice tailored to your situation, individuals should contact a professional financial adviser. For a copy of the relevant disclosure document, please contact our Distribution Team on 02 9276 4550. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782.
Global Shares Managed Account As of 31/12/2015
Risk-Reward
Time Period: 1/07/2012 to 31/12/2015
Std Dev
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0
0.0
4.0
8.0
12.0
16.0
20.0
24.0
Global Shares Managed Account Australia OE Equity World Large Blend
Retu
rn
Multiple Investment Sector Exposure Chart
Portfolio Date: 31/12/2015
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0
Basic Materials
Consumer Cyclical
Financial Services
Real Estate
Consumer Defensive
Healthcare
Utilities
Communication Services
Energy
Industrials
Technology
Global Shares Managed Account MSCI ACWI NR USD
Performance Relative to Peer Group
Peer Group (5-95%): All Managed Investments - Australia - Equity World Large Blend
Top Quartile 2nd Quartile 3rd Quartile Bottom Quartile
-5.0
0.0
5.0
10.0
15.0
3 Month CYTD 1 year 2 Years Since Incp %p.a
20.0
25.0
30.0
Global Shares Managed Account MSCI ACWI NR
Retu
rn
Market Performance
Time Period: Since Inception to 31/12/2015
Inv Bmk1
Up Period Percent
Down Period Percent
Best Month
Worst Month
Best Quarter
Worst Quarter
66.67
33.33
71.43
28.57
7.23 7.97
-4.84
13.86
-3.52
-6.25
13.41
-2.43
Risk
Time Period: Since Inception to 31/12/2015
Inv Bmk1
Return % pa
Std Dev
Max Drawdown
20.7416.14
10.87 9.87
-8.53 -6.13
Core Portfolio - Complete List of Holdings
Portfolio Date: 31/12/2015
CodeStyle Box
TotalRet 3Mo
(Qtr-End)
PortfolioWeight
%
Ibbotson Core International Eqty H (SA)
iShares MSCI Japan (AU)
iShares MSCI Emerging Markets (AU)
Ibbotson Core International Eqty UH(SA)
iShares MSCI BRIC (AU)
iShares MSCI South Korea Capped (AU)
iShares MSCI Taiwan (AU)
Cash Account
11745 È 31.7
IJP È 25.7
IEM È 16.8
11743 È 10.3
IBK È 7.3
IKO Ç 3.2
ITW È 3.2
1.8
4.66
-10.27
-3.42
-9.17
-13.66
0.55
0.17
-3.30
THIS REPORT HAS BEEN PRODUCED USING PRESENTATION STUDIO, A MODULE OF MORNINGSTAR DIRECTThis document is issued by Ibbotson Associates Australia Limited (ABN 54 071 808 501, AFS Licence No. 228986) (‘Ibbotson’). Ibbotson is a member of the Morningstar group of companies (‘Morningstar’). © 2015 Morningstar, Inc. All rights reserved. In compiling this document, Ibbotson has relied on information and data supplied by Morningstar and other third party information providers. Whilst all reasonable care has been taken to ensure the accuracy of information provided, neither Ibbotson, Morningstar nor their third party information providers accept responsibility for any inaccuracy or for investment decisions or any other actions taken by any person on the basis or context of the information included. Any Morningstar ratings/recommendations contained in this report are based on the full research report available from Morningstar or your adviser. Past performance is not a reliable indicator of future performance. Neither Ibbotson nor Morningstar guarantees the performance of any investment or the return of capital. The information provided is general advice only has been prepared without reference to an individual person’s objectives, financial situation or particular needs. You should consider the advice in light of these matters and if applicable the relevant disclosure document before making any decision to invest. To obtain advice tailored to your situation, individuals should contact a professional financial adviser. For a copy of the relevant disclosure document, please contact our Distribution Team on 02 9276 4550. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782.
Global Shares Managed Account As of 31/12/2015
THIS REPORT HAS BEEN PRODUCED USING PRESENTATION STUDIO, A MODULE OF MORNINGSTAR DIRECTThis document is issued by Ibbotson Associates Australia Limited (ABN 54 071 808 501, AFS Licence No. 228986) (‘Ibbotson’). Ibbotson is a member of the Morningstar group of companies (‘Morningstar’). © 2015 Morningstar, Inc. All rights reserved. In compiling this document, Ibbotson has relied on information and data supplied by Morningstar and other third party information providers. Whilst all reasonable care has been taken to ensure the accuracy of information provided, neither Ibbotson, Morningstar nor their third party information providers accept responsibility for any inaccuracy or for investment decisions or any other actions taken by any person on the basis or context of the information included. Any Morningstar ratings/recommendations contained in this report are based on the full research report available from Morningstar or your adviser. Past performance is not a reliable indicator of future performance. Neither Ibbotson nor Morningstar guarantees the performance of any investment or the return of capital. The information provided is general advice only has been prepared without reference to an individual person’s objectives, financial situation or particular needs. You should consider the advice in light of these matters and if applicable the relevant disclosure document before making any decision to invest. To obtain advice tailored to your situation, individuals should contact a professional financial adviser. For a copy of the relevant disclosure document, please contact our Distribution Team on 02 9276 4550. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782.
This document is issued by Ibbotson Associates Australia Limited (ABN 54 071 808 501, AFS Licence No. 228986) (‘Ibbotson’). Ibbotson is a member of the Morningstar group of
companies (‘Morningstar’). © 2015 Morningstar, Inc. All rights reserved. In compiling this document, Ibbotson has relied on information and data supplied by Morningstar and other
third party information providers. Whilst all reasonable care has been taken to ensure the accuracy of information provided, neither Ibbotson, Morningstar nor their third party
information providers accept responsibility for any inaccuracy or for investment decisions or any other actions taken by any person on the basis or context of the information included.
Any Morningstar ratings/recommendations contained in this report are based on the full research report available from Morningstar or your adviser. Past performance is not a reliable
indicator of future performance. Neither Ibbotson nor Morningstar guarantees the performance of any investment or the return of capital. The information provided is general advice only
has been prepared without reference to an individual person’s objectives, financial situation or particular needs. You should consider the advice in light of these matters and if
applicable the relevant disclosure document before making any decision to invest. To obtain advice tailored to your situation, individuals should contact a professional financial adviser.
For a copy of the relevant disclosure document, please contact our Distribution Team on 02 9276 4550. Some material is copyright and published under licence from ASX Operations
Pty Ltd ACN 004 523 782.
Portfolio Overview An actively managed diversified portfolio of global equities made up of ASX listed ETFs with global equities exposure.
Sector Specialist Managed Accounts
Asset Allocation Return Objective Time Horizon Risk Profile
Growth
Assets %
Defensive
Assets %
Australian Shares
Core
S&P/ASX 200 Accumulation Index 7 years High 100 0
Australian Shares
High Yield
S&P/ASX 200 Accumulation Index 7 years High 100 0
Australian Shares
Small Cap
S&P/ASX Small Ordinaries Accumulation Index 7 years Very high 100 0
Property
S&P/ASX 200 REITs Accumulation Index 5 years High 100 0
Global Shares MSCI ACWI Accumulation Index
(Net Dividends Reinvested)
7 years High 100 0
Cash
Bloomberg Australian Bond Bill Index 2 years Very low 0 100
This document is issued by Ibbotson Associates Australia Limited (ABN 54 071 808 501, AFS Licence No. 228986) (‘Ibbotson’). Ibbotson is a member of the Morningstar group of
companies (‘Morningstar’). © 2015 Morningstar, Inc. All rights reserved. In compiling this document, Ibbotson has relied on information and data supplied by Morningstar and other
third party information providers. Whilst all reasonable care has been taken to ensure the accuracy of information provided, neither Ibbotson, Morningstar nor their third party
information providers accept responsibility for any inaccuracy or for investment decisions or any other actions taken by any person on the basis or context of the information included.
Any Morningstar ratings/recommendations contained in this report are based on the full research report available from Morningstar or your adviser. Past performance is not a reliable
indicator of future performance. Neither Ibbotson nor Morningstar guarantees the performance of any investment or the return of capital. The information provided is general advice only
has been prepared without reference to an individual person’s objectives, financial situation or particular needs. You should consider the advice in light of these matters and if
applicable the relevant disclosure document before making any decision to invest. To obtain advice tailored to your situation, individuals should contact a professional financial adviser.
For a copy of the relevant disclosure document, please contact our Distribution Team on 02 9276 4550. Some material is copyright and published under licence from ASX Operations
Pty Ltd ACN 004 523 782.
Diversified Managed Accounts
Asset Allocation Return Objective Time Horizon Risk Profile
Growth
Assets %
Defensive
Assets %
Defensive
CPI+ 0.75% Rolling 1 year Low 15 85
Conservative
CPI+ 1.0% Rolling 3 years Low to Medium 30 70
Balanced
CPI+ 2.5% Rolling 5 years Medium 50 50
Growth
CPI+ 3.5% Rolling 7 years Medium to High 70 30
High Growth
CPI+ 4.5% Rolling 9 years High 85 15
High Growth Plus
CPI+ 5.0% Rolling 10 years High 95 5
Diversified Income
CPI+ 2.0% Rolling 4 years Medium 40 60