SUMMARY
The Fund generated a 4.9% return in the March quarter. By way of comparison, the Australian stock market grew by +3.6%, whilst the (annual) return of the RBA cash rate plus 6% equated to approximately +2.2% for the quarter. For the month of March, the Fund was flat, compared to a market decline of -0.2%, and cash plus 6% of +0.8%. Following actions taken to address performance in calendar 2022, we are pleased with the Fund’s performance in the first quarter of calendar 2023 – in particular its ability to have participated in the upside of January (despite its more cautious positioning) whilst also proving its resilience in a more challenging February and March.
A broadly flat overall market result for March covers up what was in fact a more volatile period of trading. The market fell by over 4% mid month before staging a fairly rapid recovery in the last 10 days. The Fund’s defensive characteristics provided a more resilient performance throughout the month, with a low at -2.8% in the period (compared to >-4% for market), and finishing the month slightly ahead of the market, despite the latter benefitting once again from an outsized positive contribution from the materials sector.
Cash holdings declined to 13.7% over the month as we actively deployed capital into the initial market weakness. Despite the net investment, cash holdings remain elevated relative to levels over the past 12-18 months.