Markets

Edinburgh-based Dundas Global Investors sees dividend growth, rather than dividend income itself, as the key to long-term outperformance. The numbers bear out the wisdom of that approach.

Marketing ESG credentials could be greenwashing even if correctly disclosed, according to Zenith, but going “dark” on disclosure isn’t an option either.

Companies were largely able to pass cost increases on to the surprisingly resilient Australian consumer, allowing them to defend profit margins, while retail continued to defy analysts’ expectations of a downturn.

The energy transition is full of unknown unknowns, but there are still ways to get some certainty over returns as the world changes how it generates and distributes energy.

A confluence of challenges for small caps and technology stocks has led to a dearth of companies developing into IPO candidates in the last 18 months, but that hasn’t stopped private equity teams from working hard to build up their assets.

Brokerages raising their target price on Nvidia shares this month have pushed the median view to US$500, and analysts say that may be conservative. After an impressive earnings report, hedge funds and others are piling into the chip maker even as high bond yields threaten tech stocks.

There’s still ample opportunity for loans generate higher than historical average returns, with Invesco expecting outperformance over the next 6-12 months. And with a recession potentially on the horizon they come with downside protection included.

HMC has invested heavily in the hope that after 30 years of disappointing shareholders, Lendlease can reinvent itself by shedding non-core assets and recycling capital into its large scale urban projects.

Commentators warn that a new default cycle will strip the shine from private debt strategies, but not all managers have been “sitting on their hands”. And the dislocation in commercial real estate is creating new opportunities for savvy managers.

Small caps are coming back from a tough year, while opportunities abound in the IPO market and founder-led businesses according to Ausbil small and microcap portfolio manager Arden Jennings. 

Focussing on a concentrated portfolio of quality and growing stocks can expose investors to strong profit growth and some of the best companies in the world, Claremont Global’s Bob Desmond said at the Inside Network’s recent Investment Leaders Forum. It just requires thinking through the noise and understanding a company’s culture.

Despite facing rising interest rates, a higher cost of capital and concerns about their borrowing base, non-bank lenders have made their place in the Australian economy in moments like this, when funding is needed and otherwise hard to get, says Thinktank’s Jonathan Street.