Strategy
Growth
Australia

Separately Managed Accounts – Capital Stable

2 Jan 2020
By
In June 2019, Perpetual and Mainstream started using Rivkin Portfolio's in their Separately Managed Account (SMA) offering that gives investors the opportunity to follow our proven strategies. Rivkin runs four portfolios that are offered through the SMA platform. Each portfolio is designed for a different investor type ranging from growth to defensive. Here you can find more information on our Capital Stable Portfolio.

Capital Stable

This portfolio is a low volatility portfolio that aims to achieve a return of 4% above the Reserve Bank cash rate. It is perfect for investors who want modest return with lower risk than the broader stock market.

Description# of StocksInvestment UniverseMinimum Rec. Time Frame
Portfolio of four Exchange Traded Funds to provide a stable return with low volatility4ASX Listed ETFs1 years

Table 1: Summary of Capital Stable Portfolio

The Capital Stable portfolio holds four Exchange Traded Funds that have been selected due to their low correlation with each other. What this means is that the overall portfolio produces return with a very low level of day to day fluctuation in the portfolio value. This is perfect for investors who don’t have a high tolerance for risk.

PORTFOLIO PERFORMANCE

The SMA product has been running live since June 2019 and therefore results for the Capital Stable portfolio within this structure go back to this date. The table below shows monthly returns for this portfolio after all fees and brokerage. Returns for June represent performance from the launch date of 12 June to the end of the month.

Jan (%)Feb (%)Mar (%)Apr (%)May (%)Jun (%)Jul (%)Aug (%)Sep (%)Oct (%)Nov (%)Dec (%)Total (%)
20191.702.272.74-0.49-0.721.56-0.366.78

Table 2a: Monthly Returns of Capital Stable portfolio in the SMA structure

The Capital Stable portfolio has been running as a Live strategy by Rivkin Asset Management for its wholesale clients. This means we have live performance data for an actual account going back to September 2017. The table below shows the monthly returns of an account following the Capital Stable portfolio.

Jan (%)Feb (%)Mar (%)Apr (%)May (%)Jun (%)Jul (%)Aug (%)Sep (%)Oct (%)Nov (%)Dec (%)Total (%)
20170.211.821.55-0.812.78
20180.290.63-0.061.050.250.25-0.091.93-0.18-0.33-0.910.963.82
20191.242.050.491.330.045.24

Table 2b: Monthly Returns of Capital Stable portfolio compiled from Rivkin’s Wholesale Low Volatility product returns

Furthermore, extensive back-testing has been used to determine the portfolio performance over a longer time period. Back-testing is the process whereby an investment strategy is simulated over historical stock market data to determine how a strategy would have performed if it had been run over that time. A summary of the Capital Stable portfolio characteristics and back-tested data is presented in the table below.

Investment UniverseASX Listed Exchange Traded Funds (ETFs)
Number of Holdings4
Expected Average Annual Return5%
Volatility Relative to ASX 200 Index0.07
Probability of negative return in any 12-month period3%

Table 3: Backtested statistics for Capital Stable portfolio

Benefits of a Separately Managed Account

  • Choose from four professionally constructed portfolios depending on your needs
  • All portfolio management is taken care of for you
  • Access Rivkin’s systematic strategies that have proven themselves in live trading in our retail advice product
  • Obtain institutional brokerage rates that are not typically available to individual investors
  • Execution is performed using algorithms that spread trading out across the day to obtain a fair price
  • No upfront cost – management fees are deducted from your account on a monthly basis
View Comments

Comments

We are glad you liked it

For your convenience, this will appear under your Saved articles in the homepage.