Diversified portfolios update April 2021


A good month for our multi-asset portfolios, with the Balanced portfolio rising by a little over 1.6%.

Asset class performance

A good positive return month for our portfolio unsurprisingly means a generally positive backdrop for asset classes more broadly.

Even bonds performed well, with the recent surge in interest rates taking a breather from the highs reached in March. Falling yields means rising bond prices. We continue to expect bond yields to lift, in-line with the Fed’s AIT framework. Running the economy hot, if it works (and if it is expected to work, which are two different things) mean that longer dated yields, which the Fed does not control, should rise.

For those who work better with time series graphs, we see fairly consistent picture of a strong recovery in asset prices, both over the month and over the post COVID nadir.

Hedge funds

Pleasingly, hedge funds, and alternative assets more broadly, continue to perform well. We are overweight, and the lower correlation/positive-expected-return is a useful portfolio compliment, particularly in an environment where asset prices in the traditional asset classes (stocks, bonds) are stretched.


There is no change in our positioning at the diversified portfolio level. We remain underweight equities, bonds and REITs, and overweight cash and alternatives.

Our chief concern is the low risk premia on offer across the asset classes. In government bonds this is a negative term premium, in credit a negative excess bond premium, and in shares a shrinking equity risk premium which is approaching levels that preceded material sell-offs in the past.

We will continue to trim our exposures into strength.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.

Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

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