Markets

The functionality of value investing hinges on one important and fundamental premise: that humans are fallible and emotional operators that over-react, misjudge and fall victim to overconfidence in their own assessment abilities.

The vast majority of quality asset managers will go through periods of five years of underperformance or more, which makes it difficult for that firm to take smart value bets and hold them until maturity beckons.

As many as half of all Australian private lending managers are using leverage to juice their returns, according to Challengers Investment Management, exposing themselves and their investors to mark-to-market risk.

Diving into alternative investments can be a daunting prospect, but a rewarding one for advisers looking to supplement their growth sleeve and add fresh diversifiers. A panel discussed some tips for those starting out on their alts journey.

Advisers may be holding back from private equity investment because they have an exaggerated view on the liquidity risks involved, but providers offer more liquidity now than ever, and smart advisers are capitalising on this.

You don’t need the world to end to start investing in stressed and distressed debt, according to RBC BlueBay, but it helps. And what looks to be a multi-year uptick in defaults is creating plenty of opportunities.

Lack of liquidity and transparency have long been sticking points in retail uptake of private equity, but the industry is changing its ways even as an education challenge remains.

For many Australians, REITS have been a cornerstone for those looking to dip their toes into the property market without the traditional barriers of direct ownership. So, who were some top performing managers as at January 2024?

An elevated market is a good thing, but investors that take a valuation mindset into asset allocation need to be wary of what that means for prices. “Chasing momentum” is a real danger, says Australian Ethical’s Mark Williams.

While the small companies sector of the share market is poised to benefit from the predicted retreat of inflation, the tailwinds really kick in when you throw active management into the mix according the Invesco team.

There are far simpler avenues to overseas diversification for your SMSF than property, but if you are going to take this complex, and somewhat risky route, you better do your homework.

It’s not always about finding companies that have the biggest market share or the ones that dominate the headlines. For true value investors, the key is to select companies whose forward value is fundamentally underappreciated.