G’day Core members,
Fears of:
- AI disruption
- Rapid oil price rises
- The war in Iran, Lebanon, Ukraine, Gaza & broader Middle East
- Substantial fears of much higher inflation in Australia, and
- A general currency debasement theme…
Are causing a little chaos on the local market. There’s a lot of investor uncertainty.
But guess what?
This is normal market behaviour. And it’s the perfect opportunity for us.
Whether you’re a:
- Rask Investor
- Rask Advice Platinum, Plus or FI client
- One of the 4,000 investors who follow our portfolios via Core
You should be diversified and – depending on how long you have invested with us – sitting on some tidy profits.
Now is the time diversification can pay off.
Here is a summary of the changes
Updated portfolios are also available via the Rask Invest portfolio pages.
Here’s why it’s happening and a brief summary of each position.
Most of these changes had been discussed with our Investment Committee over many months.
IAF (REDUCE by 2.5%; sold from Jupiter)
We will be reducing our core Australian Government bond exposure, IAF.
With interest rates rising recently, and potential pressure on inflation, it makes sense to trim this position in favour of gold. In the case of Jupiter, we’ll reduce IAF from a 2.5% weighting to 0%.
As I mentioned, Australian interest rates have increased, and they could increase further as oil prices spike. If the AUD keeps increasing, it may create further pressure on our economy. This isn’t an ‘all or nothing’ play (it almost never is, at Rask).
We’ll maintain some exposure to IAF in most strategies, especially our defensive strategies (Mercury & Terra). IAF has been a solid performer for us, just as we expected. Now, it fulfils its second purpose: allowing us to deploy capital during a sell-off.
EMKT (REDUCE by half, making way for IEM)
This applies to Rask Invest only, as our personal advice clients already have IEM included.
Making a ‘bold’ decision to add EMKT, the multi-factor emerging markets ETF, to your portfolios was, for the most part, an excellent move. As at 28 February 2026, EMKT had returned 37.95% in a single year – outpacing the broad index (like the one IEM follows) at 30.85%. Not bad for an ETF!
EMKT’s focus on quality and value in emerging markets was laid out by us in 2024, so I won’t repeat it here. From today, we’ll keep holding EMKT but add breadth by cutting our emerging markets exposure in half – making way for IEM.
IEM (ADD to half of EM sleeve)
This applies to Rask Invest only, as our personal advice clients already have IEM included.
The 50-50 split across EMKT-IEM was already the strategy for personal advice at Rask, so aligning the two portfolios is something we’ve wanted to do for 6 months.
Now that many Rask Invest-ors have passed their short-term capital gains tax (CGT) holding period, we feel comfortable doing this. IEM is a passive exposure over the full range of emerging markets economies. The fee is higher than we would like, but its track record is longer than the closest competing ETF (BEMG by Betashares). BEMG also has a unique legal and trading structure that I need to get more comfortable with before recommending it to anyone.
GHLD (INCREASE by 2.5%)
Our pure gold exposure, currency hedged, is already in many portfolios/strategies. GHLD adds a cushion in times of uncertainty without FX risk. If the Australian dollar keeps rising, we’ll be neutralising the currency part – and keeping exposure to the gold price in AUD.
Given how well GHLD has performed for us, we’re effectively left with a choice: potentially start trimming the position soon (if it grows too much) or increase our allocation by 2.5%. It’s a good problem to have. But a problem nonetheless. Given the geopolitical backdrop, it makes sense to increase our exposure now. A risk is that global uncertainty subsides, and/or central banks stop buying en masse (some data shows they slowed buying a little bit in February).
Important to note: I think it’s typically good for Australians to maintain some exposure to gold in USD…
GXLD (add to Jupiter, 2.5%)
We’re adding GXLD to Jupiter only, in place of IAF. GXLD is already included in many of the other strategies.
We didn’t have any USD gold in Jupiter before today. Effectively, we’re swapping domestic Government bonds, with duration/interest rate risk exposure, for USD gold. Creating a 50-50 AUD-USD gold position, with a combined total of 5%.
We retain fixed interest exposure of 2.5% in cash/short-duration securities (via AAA) and 2.5% to global bonds (hedged) via VBND.
The Jupiter strategy is not designed for short-term income, like Martian, Terra and Mercury are. The bonds, cash and gold are ballasts – allowing us to redeploy capital at times like these. That’s why we have the ’10’ in 90/10.
Rebalance event impacts
There are other benefits to rebalancing a portfolio during uncertainty.
Rebalancing now effectively means we’re increasing our positions that have fallen.
This means, in effect, adding to positions like the Australian technology ETF (ATEC) and global technology/consumer companies (via Lakehouse’s LHGG ETF). These two ETFs have performed very poorly in recent months as the threat of AI takes hold of technology companies. I’ve thought a lot about this, and I’m happy to back ATEC and LHGG at their starting weights.
And this is diversification in action. Across a good portfolio, you’ll have mostly winners, plus a couple of losers. It’s totally normal for an ‘all weather’ portfolio to have something ‘going on’ at any one time.
This is why we diversify so much.
With the diversification having done its job, we’re allowed to deploy to high-quality technology companies at discounted prices – without going over-the-top. We’re simply rebalancing to normal weightings.
Increasing our gold allowance means we won’t be trimming a great performer (gold/alternatives) in a highly uncertain geopolitical environment (which is usually good for gold).
But of course, there are risks to all of these decisions.
The most notable would be that we’re taking some money from our risk-off assets (like IAF) and putting more into alternative assets (like gold), and from short-term ‘winners’ into short-term ‘losers’ (LHGG, ATEC, etc.) – at a time when those assets could fall further. For example, gold prices could fall if the Iran crisis ‘solves itself’ much faster than expected, trade resumes and oil prices fall back to sustainable levels. If that happens, though, our LHGG and ATEC positions could benefit.
The other risk, as I see it, is splitting EM into a passive exposure that underperforms (as its been known to do during many periods over the past 20 years). My personal view of emerging markets, like China or India, is I like to have some active exposure in emerging markets. Which is why we’ve added EMKT in the past (and held Fidelity’s FEMX for years, before that – through Rask Core).
Summary
In summary, no one knows for certain what’s going to happen next. I don’t. The world is a complex place driven by economic and business fundamentals (over time) overlaid with emotion, politics and uncertainty (in the short run).
Our portfolios are diversified, resilient and ‘all weather’. Our positions are established. Our portfolio returns have held up well (albeit less so since 28 Feb 26). But I’m comfortable with our current posture and the changes announced today. I believe these tweaks will improve the risk-return outcomes from here.
What you need to do:
For Rask Invest, you do nothing. Your portfolios will be systematically rebalanced for you, in accordance with our trading windows and the team in Sydney. Your custom positions are not affected by these changes – it only impacts your core strategy (Jupiter, Terra, Saturn, etc.).
You will start to see these trades show up in your “transactions” menu (left-hand side) in the next three days. All you’ve got to do is sit back and rest easy knowing we’re on the front foot with your portfolio – when you need us most.
If you’re a personal advice client receiving this and you have questions, please contact your Rask adviser directly.
For Rask Invest, please use the members-only section inside our online investor community.
