The Australian sharemarket added just on 1% in May, with the growth sectors offsetting ongoing losses in the financial sector. Our model income portfolio, which is overweight financials, underperformed. Conversely, our model growth portfolio outperformed, adding more than 2% in the month.
Year-to-date, the income portfolio now lags the index by 3.7% while the growth portfolio has outperformed the index by 0.6%.
In our fifth review for the year, we look at how our income and growth portfolios performed in May. The purpose of these portfolios is to demonstrate an approach to portfolio construction. As the rule sets applied are of critical importance, we provide a quick recap on these.