A shifting investment landscape

Road driving

Perpetual Investments

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It’s been a year like no other. So many adjectives have been employed to describe 2020. Weird. Crazy. Unprecedented. It’s a year that will be remembered for the challenges it’s presented, which have impacted the way we work and the way we live.

As individuals and governments have grappled with the ramifications of the global pandemic,  financial markets have also been ‘crazy’. We saw a violent sell-off in equity markets in late February and March, followed by an explosive rally, particularly in technology and other growth stocks.

It is important however, that we don’t allow the global pandemic to obscure pressing challenges for investors. These challenges that are not new – indeed, they have been building for some time. This has resulted in a profound shift in the investment landscape and approaches that have worked for decades now face enormous pressure.

This indicates a different approach to investment may be warranted in the years ahead.

Challenging times require a different approach

We’re acutely aware of the problem very low term deposit rates and government bond yields have created, especially for conservative investors aiming to beat inflation. Either, one can accept very low returns, or take more risk in the hope of generating higher returns. Unfortunately, risk is not always rewarded, meaning stocks can perform quite poorly over the short term.

The challenge is to design a portfolio which can participate in the upside while protecting on the downside. To do this, rather than trying to predict the future, we aim to understand a range of probable portfolio outcomes and to construct a portfolio which can withstand extreme market events.

The result is Perpetual’s Diversified Real Return Fund, which was built to navigate change. It’s designed to enable investors to allocate to equities and credit investments when the likelihood of being rewarded for that risk is high and to manage portfolio risk through skilful portfolio construction.

We like to describe it as a sleek and powerful all-terrain investment vehicle. Precision engineered by Perpetual’s experienced multi asset team, it’s agile, nimble and packed with high-tech safety features.

We have prepared a series of short articles to help you learn more about the Fund and understand the important role it can play in your clients’ portfolios. Whether to act as a stable core, a shock absorber or a diversifying alternative, the Perpetual Diversified Real Return Fund can help you and your clients safely navigate the road ahead, curves and all. 

Find out more about the performance, strategy and holdings of Perpetual’s Diversified Real Return Fund.


This information has been prepared by Perpetual Investment Management Limited (PIML) ABN 18 000 866 535, AFSL 234426. It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. You should consider, with a financial adviser, whether the information is suitable for your circumstances. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. Past performance is not indicative of future performance. To view the Perpetual Group's Financial Services Guide, please click here.

The information is believed to be accurate at the time of complication and is provided in good faith. This document may contain information contributed by third parties. PIML and PSL do not warrant the accuracy or completeness of any information contributed by a third party. Any views expressed in this document are opinions of the author at the time and do not constitute a recommendation to act.

This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.

No company in the Perpetual Group (Perpetual Limited ABN 86 000 431 827 and its subsidiaries) guarantees the performance of any fund or the return of an investor’s capital.

The product disclosure statement (PDS) for the Perpetual Diversified Real Return Fund, issued by PIML, should be considered before deciding whether to acquire or hold units in the fund. The PDS can be obtained by calling 1800 022 033 or visiting our website www.perpetual.com.au.