Portfolio Update – April 2020

Market Outlook

Over the past month and half, a lot been written about the impact of COVID 19 on markets, but there are very few superlatives that describe March’s volatility other than unparalleled.

Record moves were experienced most days in the month, initially on the downside through mid March, and then on the upside since that time with sharemarkets now retracing around half of their entire falls. And all this has occurred in under 8 weeks in total.

As we discussed in our webinar in mid March, once markets had a sense of the COVID case load curve flattening, asset prices started to respond favourably to a slightly less uncertain outlook, and the massive stimulus programs unleashed by governments and central banks around the world.

Presently, markets are looking ahead and attempting to price in the extent of the economic downturn that is now underway. We expect this pricing process to produce further volatility in the coming months, but equally, are optimistic that notwithstanding further COVID induced shocks, markets should normalise within the next 6-12 months.

The Sestante model portfolios, despite a negative return for the quarter ended March, are now around breakeven over a rolling 12 month period (through mid April).

In our video this month, we explain what the changes made to the portfolios in response to the market action. 

Portfolio Performance

The Sestante model portfolios, despite a negative return for the quarter ended March, are now around breakeven over a rolling 12 month period (through mid April).

Summarised, portfolios have been adjusted to take advantage of the upside expected in markets in the coming 12 months as the COVID shock dissipates, but equally, they are configured to protect the assets in the portfolio should further shocks emerge.

Pride Advice – AZ Sestante
Assertive Managed Portfolio

The quarter that ended 31st March saw some of the most fraught market conditions encountered in more than a decade on the back of the COVID-19 pandemic. Market action was dominated by a flight to cash across all asset classes as the fear of economic and social damage associated with the outbreak saw what was initially considered a public health issue, escalate into an economic and market panic.

The investment committee is monitoring expectantly for an improvement in market prospects for the second half of 2020. Presuming the public health issue shows signs of becoming manageable, and economic support measures engage as intended, the committee is confident markets will find support during the coming quarter.

Pride Advice – AZ Sestante
Balanced Managed Portfolio

The quarter that ended 31st March saw some of the most fraught market conditions encountered in more than a decade on the back of the COVID-19 pandemic. Market action was dominated by a flight to cash across all asset classes as the fear of economic and social damage associated with the outbreak saw what was initially considered a public health issue, escalate into an economic and market panic.

The investment committee is monitoring expectantly for an improvement in market prospects for the second half of 2020. Presuming the public health issue shows signs of becoming manageable, and economic support measures engage as intended, the committee is confident markets will find support during the coming quarter.

Pride Advice – AZ Sestante
Moderately Conservative Managed Portfolio

The quarter that ended 31st March saw some of the most fraught market conditions encountered in more than a decade on the back of the COVID-19 pandemic. Market action was dominated by a flight to cash across all asset classes as the fear of economic and social damage associated with the outbreak saw what was initially considered a public health issue, escalate into an economic and market panic.

The investment committee is monitoring expectantly for an improvement in market prospects for the second half of 2020. Presuming the public health issue shows signs of becoming manageable, and economic support measures engage as intended, the committee is confident markets will find support during the coming quarter.