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Investing in volatile times. How Russell helped investors – December quarter 2011
Andrew Sneddon, Portfolio Manager, discusses how Russell responded to developments in Europe during the quarter.
Read video transcript here
#1 - A lot of news came out of Europe recently. What happened to markets in the December 2011 quarter?
In the December quarter, Australian shares and other growth investments posted positive returns. For example, Australian shares returned more than 2% for the December quarter.
However, that masked very choppy markets day to day that we observed through the quarter. The choppiness was because investors remained very concerned about the European debt crisis and how it may or may not resolve itself in 2012.
#2 - How did Russell respond?
We responded in two ways.
Firstly, by holding a portfolio of asset classes that respond differently to different market environments. This overall diversified portfolio produces more stable and consistent returns in what remains a very choppy environment.
Secondly, we continue to keep a very close eye on developments in the European debt crisis, adjusting our exposure to each asset class in order to protect the overall portfolio.
For example, in the December quarter we increased our exposure to alternatives such as infrastructure, and decreased our exposure to traditional investments such as shares. This is because alternative assets are less sensitive to daily developments in Europe and elsewhere.
#3 - With uncertainty expected to continue in 2012, what should I do?
The key for investors is to stick to their long-term strategic plan, and avoid being thrown off course by daily news headlines.
For example, developments in Europe will to continue to be a source of choppiness in markets for the foreseeable future. However, our global investment team has identified a number of great opportunities in areas such as Australian infrastructure, U.S. and global shares, and corporate bonds.
We'll continue to actively manage our diversified portfolios to capture these best available ideas.
For further discussion on the outlook for global investment opportunities, please refer to
http://www.russell.com/AU/institutions/our-research/market-commentary/global-market-outlook/