Wednesday, September 30, 2026

linkedIn
  • Jul 2026
  • 2025-6: – Fourth straight year of double-digit returns for diversified portfolios. How did yours go?
Asset allocation, portfolio constructionAsset classes, asset class returnsAustralian shares International sharesInvestment & Wealth Mgmt

2025-6: – Fourth straight year of double-digit returns for diversified portfolios. How did yours go?

1 Jul 2026 2 month(s) ago 2 Comments

 

 

Greetings fellow investors!

  • Today's charts show total returns from the main asset classes & segments for the 2025-6 year to June (right chart), plus 2024-5 (left) for comparison. All returns are in Aussie dollars before fees and taxes.
  • ‘Diversified’ portfolios (like Big Super) should return around 10% for the 2025-6 year - the 4th straight year of double-digit returns. If yours didn’t return at least 10%, find out why! (as a simple 70/30 ETF portfolio mix returned 10% without any fuss or fiddling, with minimal fees).
  • 10% is not bad despite inflation, rate hikes, wars and political unrest around the world.
  • The global boom has been fuelled by continuing loose fiscal and monetary policies everywhere, plus the widespread belief that governments and their tame central banks will throw even more money at any and every sign of a problem.
  • Returns for 2025-6 were a little below last year, due to lower returns on Australian shares and bond markets everywhere.
  • The ASX lagged the rest of the world badly. The only bright spot was mining: BHP & Rio were up +62% & +61%, gold miners Newcrest +51% and Evolution +50%, lithium miners Pilbara Min +276%, MinRes +188%, IGO +77%, rare earths miner Lynas +110%. Fossil fuel producers also benefited from the energy crisis.
  • But the local market was hit by big falls elsewhere – bloated building society CBA (-11%), healthcare stocks CSL (-52%), Cochlear (-60%), ResMed (-27%), Sonic (-22%), Pro Medicus (-29%), tech stocks Wisetech (-70%), Xero (-60%), plus falls in most REITs, Discretionaries, and Comms stocks.
  • The rest of the world had another good year. The stars included Intel +523%, Samsung Electric +459%, Taiwan Semiconductor +127%, while the ‘Mag-7’ were a mixed bag: Alphabet/Google +103%, Apple +41%, Tesla +32%, Nvidia +27%, Amazon +9%, Microsoft down -25%, Meta/Facebook -24%, Netflix -47%.
  • It was not just a tech boom - other global sectors were strong: Healthcare, Financials, Industrials, Energy, Materials.
  • And most other share markets outside the US posted good rises again, so it is not just a US boom.
  • Nor was it just a mega-cap boom – global small companies did even better than large caps. 
  • On the so-called ‘defensive’ side of portfolios, bond markets had another shocker, with returns below inflation ie negative real returns. Bonds were hit by rising yields (especially in Japan, Australia, Europe) with persistent inflation driven by continuing loose monetary and fiscal policies everywhere.
  • At the bottom of each chart I show total returns from a typical ‘70/30’ portfolio (similar to most Big Super fund default allocations). The 70% ‘growth’ side is split 50/50 between Aussie and global shares (50% currency hedged). The ‘defensive’ side is 50/50 Aussie/global investment grade bonds.
  • If your diversified ‘growth’ fund didn’t post 10% or more for the year, find out why!

 

Typical 70/30 growth portfolio

Here is my default allocation for typical 70/30 ‘growth’ funds, which has been fairly standard practice for Big Super funds (industry, retail, corporate) for many years:

 

Asset Class

Sector/Segment

Weight

Benchmark

Representative ETF

‘Growth’

Aus shares

ASX200

35%

ASX200 TR

STW

Global shares

Hedged Developed world shares

18%

MSCI World Net TR Hgd AUD

VGAD

Un-hedged Developed world shares

14%

MSCI World Net TR Un-Hgd AUD

VGS

Un-hedged Emerging Markets shares

3%

MSCI World Small Cap Net TR AUD Un-Hgd

iEM

‘Defensive’

Aust fixed income

Aus investment grade bonds

15%

Bloomberg AusBond Comp 0+

VAF

Global fixed income

Hedged global investment grade bonds

15%

Bloomberg Global Agg Hgd

VBND

 

Investors can easily replicate this with a simple ETF mix (the above ETFs are just examples of what is available).

I will shortly post returns on my '10-4 All-Weather ETF portfolio' - which beat this standard 70/30 mix (and also beat most Big Super funds) by a good margin again.

 

Stay tuned!

‘Till next time – happy investing and stay healthy!

 

Related Articles

Where are you on the inflation pyramid? Inflation differences by household type

  • The national CPI inflation rate is averaged across all types of spenders and households, but different types of households experience different inflation rates due to different spending habits.
  • Working households have the lowest overall inflation rate, BELOW overall national average CPI inflation.
  • Next are Self-funded retirees, with higher average inflation than working households, but still LOWER than national CPI.
  • Government age pensioners on average suffer inflation ABOVE national CPI inflation.
  • At the top of the inflation pyramid with the HIGHEST average inflation are recipients of government welfare other than age pensioners.
  • Welfare payments including pensions are indexed at the ‘Pensioner and Beneficiary Living Cost Index’ or CPI, whichever is HIGHER, which entrenches higher inflation for us all.
My latest IFPA webinar: Still bullish short-term on shares, war/inflation, My take on SpaceX + more

  • Here’s my latest webinar for the IFPA ‘Investment Insight’ series held 12 June 2026.
  • Covers impacts of the war on share markets, bonds, oil, gold, interest rates.
  • Likely outcomes of the war and implications for investors.
  • My thoughts on SpaceX
  • Are share markets over-priced?
  • Is the end of the boom near?
  • Plus audience questions.
  • Aimed at portfolio managers and advisers managing client wealth portfolios.
  • Designed to arm advisers with clear, fact-based analysis and insights to assist in answering client queries about what is happening in investment markets and what is driving returns.
Well into 4th year of global share boom. NOT just the US, it’s everywhere (except Australia)

  • We are well into the fourth year of a global share boom despite wars, inflation, fuel crises, political fracturing, social unrest, plus increasingly astronomical pricing.
  • Although US stocks hog the media headlines, the US share market is actually LAGGING most share markets again this year (as it did last year). It’s not just a US boom. It’s global.
  • Dozens of share markets are beating the US S&P500 this year.
  • AUATRALIA is once again LAGGING the US and the rest of the world by a big margin for a fourth straight year. I outline several reasons for this.
  • Pricing is currently very expensive – not just US tech stocks but everywhere including and especially Australia.
  • Four-year booms are not unusual. There have been plenty of longer booms before a crash. Over-priced booms can keep running up into even more over-priced ter
Income tax: initially temporary tax on super-rich, now permanent tax on middle class: Bracket Creep

  • Australia’s top marginal tax rate of 47% is one of the highest in the world, but it was 92.5% during WW2.
  • Federal income tax was introduced in 1915/6 as a temporary measure to fund WW1, but became a permanent tax with the top tax rate increasingly reaching down to ordinary middle class workers.
  • The income level for the top tax rate has fallen dramatically over time (in real terms), catching more and more taxpayers, due to reductions in the income thresholds and also ‘bracket creep’ – inflation silently dragging taxpayers into higher tax brackets each year.
  • Initially, income threshold for the top the Marginal Tax rate of 25% in 1915/6 was 48 times the average wage, so it only hit the super-high earners.
  • But today the top the tax rate of 47%
SpaceX: am I a buyer? How it compares to my only ‘1,000 bagger’

  • As SpaceX is priced at crazy multiples of profits, dividends, cash flows and assets, and based on outlandish growth assumptions, it is not an ‘investment’ but a speculative bet. I would look at it only as a potential ‘10-bagger’ or ‘100-bagger’ (bought with ‘play money’, not serious money I or my family will be relying on in future).
  • Here is my summary of how SpaceX compares to my only 1,000-bagger, FMG bought in 2003.
  • The problem is that SpaceX fails 7 out of the 9 tests (3 to 9).
  • Bottom line = If I were to buy SpaceX, I may ride the current FOMO boom a little higher, but it will fall heavily when (not if) the current boom ends. Unless Musk can grow profits to $1 trillion or so per year. Anything is possible, I guess!
  • TIMING is just as important as PRICING – and both are lousy for SpaceX.
2 Comments

Existing Comments

Ashley,the issue with stock heavy portfolios is that we have forgotten how bad things can get ie: lost decades of 1970, 2000 and due to recency bias we "buy the dip". I have no doubt that someone as experienced as yourself can see that we are in stagflation similar to the 1970s and these periods have very poor real returns and always end badly. I am also concerned about the increasingly wild swings of assett prices due to the excessive quantitative easing and that when the crash comes many investors won't be able to handle the volatility and will bail out of their stock heavy portfolios with heavy losses.

Henry Loyd
July 05, 2026

Hi Henry - yes what you describe is pretty much par for the course with long-term investing. It's not just a question of 'when the crash comes' - in anybody's investing lifetime there are going to be several boom/bust cycles and crashes, long periods of boom, and long periods of poor or negative real returns. Each crash is different and is triggered by different sets of events. It is always troubling to see so many people buy at or near the top of the FOMO buying frenzy (which is when most novices finally take the plunge), then hang on in hope or disbelief during the big price slide, only to finally give up and sell out at or near the boom, right before the inevitable rebound. But that's hard-wired human nature - always driven by fear & greed, following the crowd etc.
Best of luck on your investing journey!
cheers
ao

ashley o
July 05, 2026

Leave a Reply

IMPORTANT DISCLAIMERS

This is just my view of the facts as I see them. It is certainly NOT ‘advice’ or a recommendation to buy, hold, or sell any stock or security or fund. My aim is to provide dispassionate information, insights, and informed analysis for portfolio managers and advisers.

As always, investors should take your own time, do your own research, form your own views, and seek professional advice based on your own individual goals, needs and circumstances.

Please read the disclaimers and disclosures below.

 

Ashley Owen

 

Please subscribe to my Newsletter, connect on LinkedIn, or follow me on Twitter X 

 

Experiences


Director/Principal, Owen Analytics Pty Ltd (current)

Investment Markets Research & Analytics, Portfolio Construction & Management, Corporate Finance, Venture Capital, M&A, and IPOs. Investment Committee membership, consulting to advice firms and financial institutions.

Co-founder & Regular Contributor, Firstlinks (current)

Co-founder of Australia's leading investment and superannuation newsletter and website for industry professionals and investors.

Non-exec Director, Third Link Investment Managers (current)

Leading Australian equities fund-of-funds that donates all management fees to Australian charities. The fund has donated in excess of $21m to a range of Australian chartities since inception in 2008. 

Chief Investment Officer, Stanford Brown (past)

Responsible for managing over $2 billion AUM in multi-asset class portfolios and discretionary accounts at a privately-owned advice practice.

Director & Joint CEO at Philo Capital Advisers Pty Ltd (past)

Specialises in investment portfolio construction & management, multi-asset class asset allocation, and global macro strategies.

Check out my full bio here

▼

“Ashley has the rare ability to ground insightful analysis in solid data and to present it in readily understandable ways. His wry, detached style and focus on the long term is rare and willingness to share a lifetime of learning and thinking appreciated by all who come to know him.”

Toby Potter - Chair, Institute of Managed Account Professionals (‘IMAP’), the peak industry body for the discretionary managed accounts industry in Australia, representing investment managers,  advisers, Managed Account providers, and technology companies. It is the primary thought-leader for the industry in Australia, and provides training and industry events and conferences.

“Over the past 20 years, Ashley has been an invaluable assistance to me, as a reliable source of unbelievably strong and interesting data, and many good investment ideas.” 

"The depth and quality of Ashley’s research and analysis of investment markets is the best in the business.”

Dr Don Stammer - Australia’s most respected economic writer, commentator, and speaker for the past 40 years, with a distinguished career including the Reserve Bank of Australia, Chief Economist at Deutsche Bank Australia for 21 years, chair of nine ASX companies, plus numerous non-listed and not-for-profit boards.

“What sets Ashley Owen’s analysis apart from investment banks and the financial press is his deep fact-based understanding of long-term financial data, rather than getting caught up on the daily noise over issues that may generate trades or sell newspapers today, but will be irrelevant and misleading two years from now.” 

Hugh Dive, CFA. Chief Investment Officer, Atlas Funds Management, and frequent expert commentator quoted in the AFR.

"I read all of Ashley's research on financial and economic issues. His data resources, deep knowledge, and original analysis put him in a class of his own."

Ian Macfarlane AC - Former Governor, Reserve Bank of Australia (Australia's central bank), 1996-2006. Former Director, Woolworths, Leighton Holdings, and ANZ Bank. Also on the International Advisory Boards of Goldman Sachs (2007-2016),  the China Banking Regulatory Commission (2011-2014), and director of the Lowy Institute for International Policy (2004-2017).

‘For many years, Ashley has been my go-to source of information and analysis on what’s going on in financial markets and why.’

“Ashley has an encyclopaedic knowledge of the markets – I call him Mr Google!”

Noel Whittaker, AM – Australia’s best-known personal finance writer, columnist, and media commentator for the past three decades. He has written more than 20 books on personal finance, his regular columns on personal finance are published in almost every major Australian newspaper, and he appears regularly on radio and TV as an expert on finance and investing.

“Ashley’s unique fact-based analyses and insights into Australian and global markets are always worth reading. He has an incredibly deep and comprehensive store of financial markets data.”

Chris Cuffe, AO – One of Australia’s best known and most experienced investment managers – former CEO of industry giants Colonial First State, then Challenger Financial; founder and Chair of Australian Philanthropic Services, and Third Link Growth Fund; current/former chair, director and/or investment committee member of numerous funds including UniSuper, Argo Investments, Hearts and Minds Investments, Paul Ramsay Foundation, and many others.

“Ashley is one of the best writers and thinkers on financial markets in Australia. His unique analysis and research is always fact-based and insightful, not the usual uninformed market noise and waffle that infects the mainstream financial media.”

Graham Hand - Editorial Director of Morningstar Australia, including Founder/Managing Editor of FirstLinks, Australia’s leading newsletter and publishing service on wealth management, superannuation, and personal finance.

Contact us

  • ashley.owen@owenanalytics.com.au
linkedIn

Copyright © 2026 Owen Analytics

About Ashley Owen | Terms and Conditions | Privacy Policy | Archive | Disclaimer

The information contained in this document relates to historical, factual events and returns, and contains general commentary and observations about financial markets, asset classes, and asset allocation. This document, or any part thereof, does not, and is not intended to, constitute investment advice, or financial advice, or financial product advice, in any jurisdiction in which it is published, re-published or read. It does not recommend, encourage, or influence readers to buy, hold, sell, or deal in any financial product or security. Where securities of financial products are mentioned, it is purely for the purposes of illustration, context, and/or education, and not intended to influence anyone to buy, hold, sell, or deal in it. The information is current when written. All reasonable measures are taken to ensure its accuracy at the time of publication, but the author accepts no responsibility or liability for any errors or omissions. This document is only provided to, and intended for, holders of Australian Financial Services Licences. It should not be used or relied upon by any person or entity other than a duly licenced AFSL holder, or authorised representative thereof. The author receives no benefit, financial or otherwise, from any product provider, or product issuer, or any other firm involved directly or indirectly in the provision or services in or to financial markets or industries, whether mentioned in the report or not. Any opinions expressed by the author are his alone, and are intended for the purposes of education.