1/13/2021 11:00:00 PM

Fund Reviews: Diversified


Read the latest on our Conservative Fund.

Written by Mike Taylor,  Executive Director, Founder & CEO;


Following on from gains made in previous months, the Conservative Fund was up 0.7% in December and returned 6.0% for the 12 months to date, versus an average term deposit rate for the year of under 1%.

While the equity portion of the fund continues to perform well, there have been some headwinds in the bond market. With continued fiscal and monetary stimulus, the 10-year interest rate continues to creep higher. This places pressure on our longer dated bond yields. Remember that as interest rates rise, even modestly, this reduces the mark to market value of the bond portfolio even though there is nothing fundamentally wrong with the underlying bonds.

I would expect that if the economy continues to improve, bonds will remain under pressure over the year. It’s possible the US 10-year may rise to 1.5% by the end of 2021. The bond component however acts as a great buffer should equities fall in value.

Finally, the fund added a couple of value names during the month of December, including two energy plays. The fund now has a good balance of dividend-paying stocks, technology companies and Covid-19 recovery plays.

The quarterly distribution of 0.5 cents per unit was processed on 31 December 2020 and should now show in your investor portal.

Past performance is not an indicator for future performance. This is not intended to be financial advice and does not take into account any particular person’s circumstances. Before relying on this information, please speak to an independent financial adviser. Pie Funds is the issuer of the Pie Funds Management Scheme. For access to the PDSs, please click here.