The alternatives sector is unique in that it’s largely defined by what it’s not. Accordingly, how you fit alternatives within your existing asset class structure will depend on relativity, and how the investments interact with the other asset classes according to Atchison’s Kev Toohey.
The private markets juggernaut is one that has also thrown up a wealth of data that other players can use to sharpen up due diligence when making their own investment decisions – especially in the growing secondaries market.
ASX update; Magellan takes a swing
ASX nears three month low, Magellan (ASX:MFG) takes a swing, US markets head lower
The selling pressure continued on Monday, the ASX 200 (ASX:XJO) falling another 0.7%, now nearing the low points of June.
The selling was widespread, National Australia Bank Ltd (ASX:NAB) and BHP Group Ltd (ASX:BHP) down 1.4% and 1.2% respectively.
The biggest news came from Magellan Financial Group (ASX:MFG), announcing a $140 million on balance sheet investment, in the latest Australian investment bank, Barrenjoey Capital Partners.
The investment has been made from MFGs balance sheet, not within one of its many equity funds; shares fell 3.4% on the news.
This decision is a difficult one to judge, a fund manager providing seed capital for an investment bank, where generally it’s the other way around; I’ll be reserving judgement for at least six months.
At the other end of the spectrum Platinum Asset Management Ltd (ASX:PTM) CEO Andrew Clifford has suggested there are signs of a “fully fledged investment mania” driving the incredible rally in stocks.
Gold miners as gold exposure, Virgin Money stalls, Harvey Norman recovery continues
OceanaGold Ltd (ASX:OGC) and St Barbara Mining Ltd (ASX:SBM) reiterated the very real difference between an exposure to gold bullion and an investment in gold miners.
Both fell around 7% on Monday after announcing unexpected production setbacks or worse than anticipated results.
I’m not suggesting that gold miners can’t be quality investments, rather that for those seeking a hedge against volatility, physical bullion is the most suitable option.
Australian-listed UK ‘challenge’ bank Virgin Money UK (ASX:VUK) fell 9.2% after receiving a number of broker downgrades as the threat of UK-wide lockdowns increase along with an increasing likelihood of negative rates, which would further hit profit margins.
Harvey Norman Holdings Ltd (ASX:HVN) added 2.1% after providing a positive update to investors, global sales increasing 30.6% from July to September and Australian franchise sales recovering by a further 34%. The result was a 180% increase in profit across July and August.
The company is benefitting from a diversion of spending on travel, but its yet to be seen what impact the end of Job Keeper payments will have in March.
Tik Tok deal on again, off again, Dow falls 500 points, still waiting on stimulus
US markets were once again hit with a combination of rising geopolitical risk and a lack of clarity on fiscal stimulus.
After appearing to cool relations with China, the deal made by Oracle Inc. (NASDAQ:ORCL) and Walmart Inc. (NYSE:WMT) to acquire 20% of the US operations of Tik Tok appears dead after Trump threatened to renege on his approval. The Chinese are similarly pushing back on the threat to their own privacy.
Over the weekend a Federal Judge blocked Trump’s ban on the WeChat app, suggesting it was an important communication tool for Chinese Americans, showing the checks and balances of the US system still have some power.
A second stimulus deal for a stuttering US economy facing the threat of another wave of lockdowns appears unlikely, hitting financials with JP Morgan Inc. (NYSE:JPM) heading 3.1% lower.
The banking sector was also hit by a investigative story highlighting many illicit transactions occurring through global banks.
Overall, the S&P 500 finished down 1.3%, but the technology sector, behind Adode (NASDAQ:ADBE) and Zoom Communications (NASDAQ:ZM) held the Nasdaq to a loss of just 0.1%.
This trend is set to continue as the world comes to terms with an impending election, stuttering growth and the threat of a second wave of lockdowns due to the resurgence of COVID.
