What a difference six months can make. Since our previous edition of Achieve, the performance of most asset classes has strengthened. For now, the worst of the crisis appears to be over, but the outlook is still not clear cut.
To the relief of many, the sharemarket rally that started toward the end of March has continued. Investor confidence improved as economies around the world started to show signs of recovery, or at least of slowing decline. The strength of the sharemarket recovery has caught many by surprise and it’s likely that the pace of recovery will continue to surprise, as it has after other recessions.
History has shown us that investment markets recover at an astounding pace after a downfall – often in short spurts that are difficult to time. To provide some perspective, Australian and global sharemarkets have gained more than 45% and 57% respectively** since the lows in mid-March, meaning that those patient investors who stayed true to their long-term objectives have been rewarded.
We’ve also seen many forward-looking economic indicators show strength, with many now decidedly more positive than over the last six months; government stimulus packages have helped local and global economies stave off deeper declines; and credit market conditions have improved, with corporate borrowing terms returning to conditions seen prior to the crash.
So, for the best part, investment markets appear to be on their way to a much-anticipated recovery, benefiting those invested in diversified portfolios. Yet, if the last 18 months has shown us one thing, it’s that investing in the financial markets isn’t always smooth sailing, and while it appears that we’re over the worst of the crisis, the road to recovery may yet be a bumpy one.
| Russell portfolios | Quarter | 1yr (p.a) |
3yrs | 5yrs | Inception date * | Since inception (p.a) |
| DIVERSIFIED PORTFOLIOS | ||||||
| Russell Conservative | 7.3% | 0.9% | 2.8% | 4.9% | 01/07/03 | 5.3% |
| Russell Diversified 50 | 9.6% | -2.1% | 0.7% | 4.8% | 01/07/03 | 5.6% |
| Russell Blended Balanced | 12.0% | -5.2% | -1.0% | ‡ | 01/04/05 | 3.4% |
| Russell Balanced | 11.6% | -6.0% | -1.2% | 4.6% | 01/07/03 | 5.9% |
| Russell Balanced Opportunities | 11.2% | -5.5 | ‡ | ‡ | 01/07/08 | -6.4% |
| Russell Growth | 13.6% | -9.5% | -2.8% | 4.7% | 01/07/03 | 6.5% |
| Russell High Growth | 15.3% | -9.4% | -2.9% | ‡ | 01/04/05 | 2.5% |
| SECTOR PORTFOLIOS | ||||||
| Russell Australian Cash | 0.7% | 3.8% | 5.0% | 4.8% | 01/07/03 | 4.6% |
| Russell International Property Securities - $A hedged |
19.3% | -27.8% | -13.8% | ‡ | 01/04/05 | -3.2% |
| Russell Australian Shares | 18.0% | -5.2% | 1.7% | 9.6% | 01/07/03 | 10.9% |
| Russell Australian Opportunities | 19.0% | -3.1% | 0.7% | ‡ | 01/11/04 | 6.6% |
| Russell International Shares | 8.8% | -17.0% | -9.1% | -1.6% | 01/07/03 | 0.8% |
| Russell International Shares -$A hedged |
13.0% | -21.3% | -8.1% | ‡ | 01/11/04 | -0.1% |
| Russell Global Opportunities | 9.7% | -11.3% | -6.2% | ‡ | 01/04/05 | -0.5% |
| Russell Socially Responsible Australian Shares | 15.4% | -6.9% | ‡ | ‡ | 01/07/08 | -9.5% |
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*The date the investment portfolio became available. |
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