At Forrest Private Wealth, our investment philosophy underpins our financial planning advice, which ensures our client’s wealth benefits from long-term exposure to equity markets. We believe holding a well-diversified portfolio of predominantly dividend-paying businesses over a long-term period is essential in financial planning for wealth accumulation and, ultimately, retirement planning.
By following our retirement planning process, a Forrest Private Wealth financial planner stays true to their investment advice, ignoring the noise and pressures of the market to provide their clients with a stress-free retirement. At Forrest Private Wealth, our financial planners capitalise on an investment philosophy that provides predictable income streams from equity markets, setting clients up for their desired retirement.
Long Term Portfolio
The Long Term Portfolio returned -4.42% in March as the US-Israeli-Iranian conflict, the effective closure of the Strait of Hormuz, and a second consecutive RBA hike to 4.10% triggered broad risk-off. The S&P/ASX 300 fell 7.30%, its weakest month in over a year.
Losses were widespread across equities. GCQ Flagship was the largest quarterly detractor, followed by Pella and Montgomery Small Companies. However, our defensive allocations have been earning their keep: Ausbil Global Essential Infrastructure was the strongest quarterly contributor, Talaria posted +1.5% in March via its value/options overlay, and our private credit holdings continued delivering steady income. One year numbers are heavily influenced by this recent pullback in growth markets, but longer term we remain very confident that our growth-oriented approach will deliver on our objectives.
Short Term Portfolio
The Short Term Portfolio returned -0.07% in March but remained positive over the quarter, an impressive result in a very difficult market. The Middle East conflict drove a sharp repricing across domestic bonds, with the Bloomberg AusBond Composite Index falling 1.42%, its steepest monthly decline in several years.
Western bore the brunt through its duration positioning. The credit managers held firm. La Trobe, MA Priority Income, and MA Secured Real Estate Income each posted positive returns, underscoring the resilience of secured, floatingrate lending in a rising-rate environment. Over the past year the model returned 4.80% well ahead of the RBA Cash Rate benchmark at 3.84%.
Micro Cap Report
The Micro Cap Portfolio returned -8.79% in March, a steep drawdown but one that is entirely within expectation for concentrated small/micro cap exposure in a month where the ASX 300 itself fell 7.30%.
Every manager was negative, as one would expect in this environment. SGH Emerging Companies and Montgomery led the declines, with materials names hit hardest as surging energy costs raised margin concerns.
The global sleeve provided some relative cushioning. Spheria fell just 1.9% and Ophir 4.2%. This type of drawback comes as part the proposition of micro cap investing. Even with this pullback, we see the compounding potential of our approach reflected in our three year annualised return, which remains above 10%.
Valuations have compressed meaningfully, which historically precedes strong recoveries in the small cap space, though rising rates and geopolitical uncertainty remain near-term headwinds.
Forrest Private Wealth’s discipline in providing financial planning, retirement planning, and wealth management services to its clients allows our clients to benefit from years of experience providing financial advice through major impacts to equity markets where staying the course has helped them.
Forrest Private Wealth has a dedicated team of financial planners and support staff providing clients with peace of mind in working towards and achieving their life goals.