Equities

The index-hugging wall of money can’t break the maths of the market, a new paper argues, but it may exacerbate the “long winter” of small caps and value stocks.

By avoiding market forecasts and not making prognostications based on macroeconomic conditions or political changes, the Claremont team is able to focus on something much more predictably profitable – its own proven process.

The potential for small and mid-cap companies to outperform the bigger players on indices is clear, with liquidity expected to increase as inflation comes off the boil and money flows into the economy. So which funds are best positioned to take advantage?

Nobody really cares about outperforming benchmarks – they want to make real money and avoid real losses. Atlantic House thinks it’s got the perfect way to do just that.

Meeting the myriad metrics for investment set down by Claremont Global is just the start of a selection process that sees no more than 15 companies held at any one time. It turns out that owning the world’s best businesses takes patience and a whole lot of precision.

The frictionless movement of assets is becoming a common feature of markets around the developed world, yet Australia remains a step behind. The ASX is in no mood to rush the move to T+1, however, after its calamitous attempt to implement distributed ledger technology.

The global banking system has proven both resilient and lucrative for investors since it seemed to teeter on collapse just over a year ago. The turnaround highlights the kind of alternatives available for those that don’t see enough value in the prevailing big tech stocks.

Valuations at the top end of indexes are sky high, but with that comes inflated forecast earnings. For savvy investors, it may be time to rotate towards more value-oriented stocks according to Eric Marais from Orbis Investments.

A huge benefit has already been realised in the price of the Magnificent Seven and it might be time to take some risk off the table instead of speculating on future fundamentals, according to Lazard.

The incredible performance of the Magnificent Seven mean investors aren’t always seeing the technological growth that’s driving industries like professional services, construction and medicine.

You don’t need to be a tech stock advocate to understand the importance of looking beyond the headlines and the hype, creating your own narrative based on facts, and assessing each opportunity with a clear lens.

Contrarian investors are adept at spotting misalignment that leads to arbitrage between real value and perceived value. But it isn’t easy. “True bargains are hard to come by,” says Orbis Investments’ Eric Marais.