Balanced

Balanced ETF portfolios EUR Q4 2021 commentary

SaxoSelect Commentaries
Asset classesStocks (developed and emerging equity), bonds, non-traditional
InstrumentsETFs
Investment styleMacro, diversified investment focus
Quarterly return (net of fees) 
Defensive1.94%
Moderate4.44%
Aggressive 
7.17%

Market overview

Q4 2021 was generally positive for risky assets, as investors focused on economic resilience and corporate earnings. The quarter began with the emergence and spread of the new Omicron variant across the globe, necessitating new restrictions in some economies. Europe, in particular witnessed high resurgence rates and a rise in hospitalizations, forcing governments to re-introduce restrictions on activity. As such, markets witnessed some deleveraging of risky assets and equities in a typical risk-off move. As the quarter progressed, mounting evidence arguing that the Omicron variant was a ‘less deadly one’, dissipated some investor concerns and resulted in risky assets rallying back up. 

In general, developed market equities performed better than their emerging market peers, wherein China continued to remain a drag on performance, given its regulatory uncertainty and ‘Zerocovid’ stance. 

On the policy front, the quarter saw the Fed opting for a more aggressive stance on tackling inflation which was seen rising at its fastest pace to 6.8% year-over-year in November. The Fed conceded that there are mounting signs that inflation is not only broadening out, but also at a greater risk of becoming more entrenched. As such, it is set to double the pace of tapering of its pandemic-era stimulus package.

On the macro front, December saw a string of robust economic data releases. The U.S. unemployment rate fell further to 3.9%, with job creation being the highest in the leisure and hospitality sector, suggesting a recovering labour market.

The U.S. Composite PMI printed at 57, suggesting that the economy was still in strong expansionary territory. On the other side, the Eurozone Composite PMI printed 53.3 in December. Within fixed income, government bonds showed mixed performance, with inflation linked bonds performing better than nominal government bonds. On the credit side, high yield bonds outperformed investment grade bonds in an overall risk-on market environment. 

Portfolio performance

Returns net of feesDefensiveModerateAggressive
Oct0.7%2.6%32%
Nov-0.3%-1.0%-1.4%
Dec1.1%2.7%3.6%
Since Inception (Sep 2015)23.05%44.46%60.41%

In Q4 2021, markets remained volatile as the Omicron variant spread across the globe, necessitating new restrictions in some economies. In addition, markets braced for continued high inflation, prompting the Fed in the U.S., to reduce its bond-buying programme at a faster pace. Against this backdrop, all five portfolios delivered positive performance over the quarter, with the higher risk profiles outperforming the lower risk profiles. Within the equity sleeve, developed market equities continued to show strength despite market volatility. Particularly, broad U.S. equities and U.S. ESG equities contributed the most to performance, followed by European equities. Emerging market and Asia-Pacific equities were broadly flat over the quarter. 

Within fixed income, government bonds, particularly U.S. and European linkers contributed to performance given continued high inflation expectations. 

 

Portfolio Allocation and top portfolio holdings (as of Dec 2021)

q42021-balanced-EUR-defensive

q42021-balanced-EUR-moderatge

q42021-balanced-EUR-aggressive

Disclaimer

Any information found in this document, including performance information and statistics are subject to change. You can find the latest updated pricing information on the description page for each available portfolio. In providing this material Saxo Bank has not taken into account any particular recipient’s investment objectives, special investment goals, financial situation, and specific needs and demands and nothing herein is intended as a recommendation for any recipient to invest or divest in a particular manner and Saxo Bank assumes no liability for any recipient sustaining a loss from trading in accordance with a perceived recommendation. All investments entail a risk and may result in both profits and losses, and all capital is at risk. In particular investments in leveraged products, such as but not limited to foreign exchange, derivatives and commodities can be very speculative and profits and losses may fluctuate both violently and rapidly. Speculative trading is not suitable for all investors and all recipients should carefully consider their financial situation and consult financial advisors in order to understand the risks involved and ensure the suitability of their situation prior to making any investment, divestment or entering into any transaction. Any mentioning herein, if any, of any risk may not be, and should not be considered to be, neither a comprehensive disclosure of risks nor a comprehensive description of such risks. Any expression of opinion may not reflect the opinion of Saxo Bank and all expressions of opinion are subject to change without notice (neither prior nor subsequent).

SaxoSelect Balanced Portfolios are offered by Saxo Bank. BlackRock’s data which is utilised by Saxo Bank in building the SaxoSelect Balanced Portfolios is based upon certain internal assumptions and BlackRock has not considered the suitability of the content of its data against individual needs and risk tolerances for all investors. As such, BlackRock’s data is for information purposes only and does not constitute investment advice or an offer to sell or a solicitation of an offer to buy the securities described within. BlackRock’s data has not been prepared in accordance with the legal requirement designed to promote the independence of investment data and is not subject to any prohibition on dealing ahead of the dissemination of the data provided to Saxo Bank and, as such, is considered to be a marketing communication to Saxo Bank. 

iShares and BlackRock are registered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”) and are used under license. BlackRock is not affiliated with Saxo Bank. BlackRock makes no representations or warranties regarding the advisability of investing in any product, portfolio or service offered by Saxo Bank or any of its affiliates. BlackRock has no obligation or liability in connection with the operation, marketing, trading or sale of any product, portfolio or service offered by Saxo Bank or any of its affiliates nor does BlackRock have any obligation or liability to any client or customer of Saxo Bank.

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.