December was a terrible month for global equities, especially the US equity market (S&P 500) which posted its worst December result since 1931. Even US tech stocks, which had previously seemed almost invulnerable, were not immune and the NASDAQ fell heavily. The MSCI World Index lost -4.1% and the Australian equity market lost -0.7%. The diversification in the Stonehouse Core Value Portfolio (CVP) provided meaningful protection against the disruption in global markets with the portfolio posting a return of -0.8%.
Within the domestic equity component of the Portfolio, the small cap exposure through SGH ICE (-4.20%) was the largest detractor, symptomatic of the tough period for smaller cap stocks in general. This was followed by Allan Gray Australia Equity (-1.3%), IML Equity Income (-0.7%) and the beta exposure held in Macquarie True Index (-0.2%).
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