Opinion

With traditional equity managers losing the fight against passive product providers, diversification into more specialist classes of asset management may provide a more sustainable path. But that’s a pricey endeavour, and easier said than done.

The benchmarks that are supposed to measure performance and create alignment with end investors are working against asset managers, and the industry must find new ways to demonstrate value before it’s too late, according to MFS.

A slowing economy has prompted S&P/ASX 200 companies to keep a lion’s share of their earnings by tightening shareholder distributions, with fund manager Martin Currie identifying the resources sector as a real cause for concern regarding future income.

Peoples’ notion of how they will fund their retirement habitually downplays the role of social security. Reflecting a lack of understanding about how the different income streams interact, it behoves superannuation funds to better educate their members.

While APRA’s proposed hybrid phase out is designed to improve the resilience of the financial system, it will inevitably impact investors and the strategic plans that some advisers have laid out. Navigating the transition will require forethought.

True diversification means owning assets that are truly uncorrelated. But that fact hasn’t stopped big investors from piling into the private markets while pretending that the Fed Put can protect their public portfolios.

With markets at all-time highs and term deposits paying 5 per cent, the focus needs to shift away from relative returns and back towards positioning for “consistent, absolute” returns that accommodate present market risks.

Pessimists are still trying to shoehorn the “bubble” narrative into the private capital story, but an EY report highlights not only the rise of this burgeoning ‘alternative’ sector, but the reasons it’s likely to keep growing.

Why Powell went for a double-dip on the guide rate at the world’s most important reserve bank, sans the presence of a significant economic event that would typically predicate it, remains a mystery. What is clear, though, is the near-term direction of rates in US.

The shift in focus from financial advisers to research consultants continues apace, both here and abroad, as asset managers follow the great money management migration.

In the Dixon’s inquiry vertical integration will not only be writ large, but it will have thousands of victims’ names attached to it. The practice has run relatively unfettered for years, but that may be about to change.

Australia’s sovereign wealth fund’s prediction of a tough year for investors didn’t come to pass, but they’re not the only well-resourced manager that missed the mark. For investors, this period is a reminder that investment patterns may exist, but markets certainly aren’t beholden to them.