After a horrific March, the sharemarket bounced back in April, to recover almost all of the previous month’s loss. While all sectors rose, financial stocks were materially impacted by revelations at the Royal Commission.
Our model portfolios, which are overweight financials, were therefore affected too. Although both portfolios generated positive returns in April, the income portfolio now lags the index by 2.4% while the growth portfolio has underperformed by 0.4%.
In our fourth review for the year, we look at how our income and growth portfolios performed in April. 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.