Asset Allocation

“We recently cut risk but stick with stocks over bonds for now. Equity prices now reflect much of the worsening macro-outlook and hawkish Fed” were the latest comments from the Blackrock Investment Institute in their weekly research note.

Private equity is eating the ASX alive. Nearly every other month there is another billionaire dollar private equity approach of an ASX company.

The Liberal Party joined the ALP in focusing on housing affordability during their formal campaign launch this week.

March stands out as being one of the most difficult periods for investors in a generation. On the one hand, bond markets send fixed income to its worst return in more decades, and on the other, equity markets were sold off broadly on valuation concerns as bond yields ended a forty-year downward trend.

Markets are falling, interest rates are rising alongside inflation, the US dollar is appreciating along with bond yields and money is moving away from risk. While the crisis in Ukraine still plays out, it certainly has exacerbated risks surrounding growth and inflation.

The VIX Volatility Index or Fear Index hit a 52-week high of 38.94 last week after $65bn was wiped off the Australian share market.

The classic way of thinking has been to ditch bond funds as interest rates rise. Why? Because as rates rise, bond prices have an inverse relationship, and drop in value as newer bonds with higher yields become more attractive. Sounds about right?

During March, Australia’s sharemarket unexpectedly claimed pole position against the majority of the world’s larger and more developed markets.

Amid ongoing elevated volatility, some financial advisers are recommending that investors hold alternative investments, including market neutral funds, which could help cushion portfolios against a broad market sell-off.

The move away from so-called ‘growth stocks’ which began in Q3 2020 is set to continue, with the winter for ‘value investing’ set to thaw according to Colin Graham of Robeco’s Muti-Asset team.

2022 has been a difficult time for most investors, but for none more so than bond fund managers. The New Year’s resolution of global central banks to (finally) aggressively combat accelerating inflation has seen an incredible surge in bond yields in Australia and around the world. A case in point is the Australian 10 Year…

The passive vs. active debate remains alive and well, particularly in the larger company universe, where being different to the index is quite a challenge, and in many cases, a career risk. The consistent standout among the quarterly passive vs. active reports, however, has been the Australian smaller company sector. Globally recognised as companies valued…