The March quarter has been another volatile quarter. The Australian market and global markets having to contend with several issues that had major impacts on the economy and investment conditions. Among these were weakness in the technology sector, the continued Covid impact and then the Russia invasion of the Ukraine. The ASX started the quarter at 7,594 and has only just recovered to this level at the end of the quarter.

Limberg Asset Management was active during the start of this quarter reviewing fund managers given the recent above-mentioned events and the volatility. As a consequence of these circumstances, we made changes to the managed funds to protect portfolios and ultimately to deliver returns in the coming years.

Actions taken through the quarter:

• Early January we removed the Hyperion Global fund and reduced the Hyperion Australian fund. Both these funds have large exposure to technology stocks and in particular Afterpay which delisted in Australia being taken over by US company Block (formerly Square). Tech stocks were subsequently out of favour with the market and fell in value across the sector.
• The Russian invasion of the Ukraine has sent shock waves through the world and impacted markets. With the threat of nuclear war on the cards we took to the opportunity to remove the equity exposure and reduce the risk within the investment strategies. This remains a significant risk to investment markets around the world.
• We increased the exposure to Metric Direct Income Fund. This is a domestic high quality credit fund that has consistently returned approximately 5% p.a. with a very conservative risk profile. The investment exposure has been increased to about 40% during this volatile period. We have attached the fund summary for your reference.

Future actions:

• We will continue to use the Metric Direct income Fund for the stable returns and income that it can provide.
• We will gradually increase the equity exposure into fund managers to provide growth and income in the coming years taking into consideration where current valuations are and interest rates.
• Holding cash will be important in volatile markets as it provides the opportunity to reinvest when valuations fall.

Upcoming June Quarter:

Coming into the final quarter for the financial year we will review your account and now is the time to consider any potential planning and strategy for your superannuation:

• Concessional contribution cap is $27,500 if you wish to top up you tax deductible contributions. There is the ability to bring forward past years unused caps.
• Non-concessional contribution cap is $110,000 per year
• Take advantage of the Government co-contribution by contributing up to $1,000. The Government will then contribute up to $500 based on your income.
• Pension minimums remain reduced by 50%.

Thank you for your continued support and if you would like to discuss any of these strategies please don’t hesitate to get in touch.