The Market Matters Active Income Portfolio provides an active approach to income producing equities, ETFs and listed Income Securities – Click here to view
The Income Portfolio added +0.87% over the course of the week while cash sits at ~4%. AGL Energy (AGL) led the line up +5.60% although after such a strong rally from the lows, some consolidation here would not surprise, BHP was also strong +4.59% while Alumina (AWC) +3.98% has been on the recovery path. The most notable drag was Magellan Financial Group (MFG) down by -5.53%.
We made no changes to the portfolio over the course of this week however we are currently questioning two main aspects:
- Our current skew towards equities over fixed income which sits at 28% in fixed interest (incl Hybrids), versus 68% in equities (& 4% cash). Given our expectations that 2022 will be a more challenging year for equities overall, we are looking to increase our weighting towards FI.
- Inline with this view, we are also considering the ‘beta’ of this portfolio which is a measure of volatility versus the market. The objective of the Income Portfolio is income but with significantly less volatility than the underlying stock market. While asset allocation influences this, so too does the type of holdings in the portfolio. For example, we hold Insignia Financial (IFL) & Magellan Financial Group (MFG), both being exposed heavily to financial markets. To reduce the ‘beta’ of the portfolio, it would makes sense to reduce financial markets exposure.
