SaxoWealthCare Quarterly Commentary Global Growth 2024Q2

Portfolio Performance

Source: Data from Bloomberg, Morningstar, BlackRock, Amundi, from 06/30/2014 to 06/28/2024. Inception date of the strategy is 5/31/2022. Returns are shown in SGD and gross of costs such as management fee and transaction costs but net of ETF costs (TER). Returns are calculated with a monthly rebalance to target allocation. Returns before the launch of the strategy with Saxo are calculated based on the portfolio allocation at the launch date. These historical returns do not attempt to simulate investment decisions that could have been made before the first portfolio was implemented with Saxo. The returns presented are indicative of the returns of individual investors, which may differ slightly.

Global stocks kept going up in the second quarter, while global bonds stayed mostly the same. The stocks and bonds in our portfolios progressed in line with the target market: global stocks with an Asian bias.

In the first half of 2024, investors who took more risks saw their assets grow significantly, with returns of +11.2% while conservative investors saw their portfolios grow more modestly.

Portfolio Protector and Goal-Based Strategies 

Investors who have opted for Portfolio Protector or Goal-Based strategies have their own unique asset allocation that depends on their individual preferences and constraints. Still, the mix of assets in their portfolios will fall somewhere on the spectrum of the Fixed Mix portfolios since they are composed of the same building blocks for equity and bonds. Hence, we believe the information presented in this report should bring them some light to interpret the performance of their portfolios accordingly.

Portfolio Changes

Equity  

The equity portfolio was rebalanced two times in the second quarter of 2024.

This portfolio gives investors a broad exposure to equities with a focus on Asian equities. It aims to outperform global stock markets via dynamic tactical adjustments to the mix of ETFs in the portfolio. These adjustments are done via two investment models: country rotation and thematic investing. Country rotation is implemented through ETFs that track the general market of various countries and represents the biggest share of the portfolio. The rest of the portfolio is allocated to the thematic investing which is implemented through ETFs that select stocks based on megatrends, aka long-term changes that affect societies and economies in a transformational way.

Late May

This rebalance is motivated by changes to the emerging market equity rotation sub-strategy. Among East Asian countries, there is a preference for China, as support is expected for reforms in the property sector and policies that favor investors. As such, the allocation to China was increased to an overweight versus the benchmark. The portfolio remains slightly overweight in South Korea, but it moves to an underweight position in Taiwan to lock in some gains after the strong rally driven by the tech sector. India remains still the second largest allocation and the overweight position is maintained, supported by positive momentum and potential upside from a BJP victory in the ongoing general elections. The allocations to the other Asian countries are kept in line with the benchmark, in the absence of a strong view regarding these countries.

Late June

This rebalance was motivated by changes within the thematic sleeve as well as the Asian market sub-strategy. Within the thematic sleeve, the allocation to the Automation & Robotics theme was trimmed down in favor of Healthcare Innovation. This move is based on favorable earnings estimates and positive sentiment for the companies in the Healthcare Innovation theme. Within Asian equities, the position that was reduced most is India, and your capital is redeployed mainly into exposures to Taiwan and South Korea. With the elections now behind us, the valuation premium is expected to flatten in India, while the AI theme could continue to play strongly for Taiwan and South Korea.

Bonds 

No changes were made to the bond portfolio in the second quarter of 2024.

This is a yield-seeking bond portfolio. It is composed of global government and corporate bonds with a medium duration, but it also has a special focus on Asian investment grade corporate bonds. The foreign currency exposure is mostly hedged to USD in this portfolio. It is designed to invest for more stable returns than equities and to act as a diversifier to equities during negative periods, with a focus on the Asian region.