SUMMARY
The Fund generated a +6.1% return in January. By way of comparison, the (annual) return of the RBA cash rate + 6% equated to approximately +0.8% for the month, whilst the Australian stock market improved by +6.6%.
The positive performance from equity markets in January represented one of the strongest starts to a calendar year for the ASX on record. It aligned with broader strength in global indices as evidence emerged of inflation tapering earlier, and at a greater magnitude, than had been expected, fuelling investors’ appetite for a market recovery following a more challenging 2022. We were surprised at the magnitude of January’s gains, and find ourselves more cautious than it would appear the market is right now. That said, we were very pleased to be able to participate in the upside during the month, particularly given the defensive positioning of the portfolio, the elevated levels of cash on hand, and the impact of carrying put options in such a strong market.