Moofolio Vision – a tough month

This article discusses the performance of three model portfolios

Conflict in the Middle East, concerns about inflation, huge stock rotations as investors spread across markets, and sentiment fluctuations about winners and losers from Artificial Intelligence all contributed to a difficult trading environment over the month of June.

The task was made more difficult by massive daily moves. When stocks that are valued in the tens or hundreds of billions of dollars are changing in value by 5%, 10% or even more in a single trading session, the danger to portfolios is obvious. Thankfully, many of these were melt ups, not down.

On 1 June we asked you which of our model portfolios would perform the best. With thanks to all those who voted, here’s what you said:

The spotlight for moomoo community members remains firmly fixed on US markets. The challenge is that while the major indices hit fresh all-time highs in June, they did it at different times. The $Nasdaq Composite Index (.IXIC.US)$ and the $S&P 500 Index (.SPX.US)$ hit highs in the first week, and finished lower. The $Dow Jones Industrial Average (.DJI.US)$ and the $Russell 2000 Index (.RUT.US)$ lagged, and then hit their highs in the last few trading days of the month.

These differences in performance meant that individual stock selection was a strong driver of portfolio performance over June. The US Super 10 portfolio is a good example. Although it was saved after cutting losing positions in $Meta Platforms (META.US)$ and $Microsoft (MSFT.US)$ , the shift away from the Magnificent 7 stocks saw it underperform. Here’s a table showing the performance of the portfolios for the month:

Every portfolio went backwards in June. Despite the falls, all remain in positive territory, merely giving up some of the earlier gains. This is the normal course of events in share investing and no cause for alarm. The higher potential rewards of stocks comes at higher risk and the experience in June is a demonstration of this principle.

The biggest takeaway from the table is the performance of the 3 stock portfolio. It fell the least over the month, and even after the loss it is 25.57% ahead since September 2025.

In tougher markets, quality counts. The outperformance of the Dow Jones is one indicator, the strength of the 3 stock portfolio is another. Three blue chip stocks – $BHP Group Ltd (BHP.AU)$, $ANZ Group Holdings Ltd (ANZ.AU)$ and $Wesfarmers Ltd (WES.AU)$ – are outperforming both Australian and US shares:

3 stock portfolio (orange line) beats the market

Since September, the 3 stock portfolio has beaten the $S&P/ASX 200 (.XJO.AU)$, the $S&P 500 Index (.SPX.US)$ and the $Nasdaq Composite Index (.IXIC.US)$.

The simple elegance of the portfolio is reflected in the fact that following a recovery in $Wesfarmers Ltd (WES.AU)$ share price, all three stocks are now in positive territory. The stocks were originally chosen as a proxy for the Australian share market. A major miner, a bank and an industrial conglomerate approximate the make-up of the $S&P/ASX 200 (.XJO.AU)$. It was the requirement that they be large and well-established business with strong cashflows that arguably delivered the benefit.

The elevated volatility in some stocks suggests that higher quality might continue to drive outperformance. The HALO trade (Heavy Asset, Low Obsolescence) focus on larger companies with higher barriers to entry and strong balance sheets and cash flows is an example of investors seeking quality stocks.

Where are you seeing higher quality? What stocks and sectors are better placed to weather any market storms? Tell the community in the comments below.

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