The Market Matters Active Income Portfolio provides an active approach to income-producing equities, ETFs and listed Income Securities – Click here to view
The portfolio was higher during the week up 0.38% with cash at an elevated 12%. Pendal (PDL) was the top performer adding 7.55% following the confirmed tilt by Perpetual (PPT) while G8 Education (GEM) edged 4.12% higher following their results which showed improving occupancy levels in their centres. On the flip side, Service Stream (SSM) -14.20% was the biggest drag on a weak FY22 result which we cover below.
Portfolio positioning:
- The portfolio holds 12% cash, 33% in Fixed Income & 55% in equities which is our lowest equities exposure since the portfolio began in 2017.
- This conservative stance implies some concern around the market but also a more favourable backdrop for fixed income.
- We can now achieve above 7% in major bank tier 1 hybrid securities while other lower risk fixed income investments can yield ~5%
- The portfolio objective centres around consistency in returns with high tax-effective income, targeting RBA cash +4% and quite simply, we do not need to take as much risk now to achieve this.
- Expect the 12% cash to target fixed income over and above equities unless we see a material pullback.
