Today I review research that shows if Labor eliminates negative gearing and increases capital gains tax by 50%, national house prices could fall 9-12% on top of the current declines; parse new analysis from CoreLogic highlighting a spike in the share of apartment owners realising losses when they sell their... Show More
Today I bust a bunch of big myths relevant to the current price action: specifically, I show why bonds are, contrary to popular belief, a terrible equities hedge (the oft-mooted negative correlation is incredibly unreliable and often positive); why the popular low-rates-for-long meme is completely bogus; why you should not... Show More
The ‘reach for yield’ has caused formerly defensive portfolios to gradually venture into higher risk assets that could leave them exposed to downturns. As a consequence, Gopi Karunakaran, Portfolio Manager at Ardea Investment Management urges investors to question just how defensive their portfolios really are. Show More
This week I interview Tim Lawless, the head of research at Australia's largest real estate data company, CoreLogic, who says fears of a future Labor government eliminating negative gearing and doubling capital gains tax on housing (and equities) are one reason why house prices are falling as investors run for... Show More
Stuart Dear, Deputy Head of Fixed Income at Schroders, believes that value in bonds has improved in both absolute and relative terms. The yields on offer in US 10-year government bonds have risen from a low of ~1.50% to current levels closer to 3%. This move has happened at a... Show More
When a young Charlie Jamieson arrived at work in London on September 11th, 2001, little did he know how much that day would affect his views on markets. At the time, he was trading US Dollar bonds from Merrill Lynch’s London office, having just left the New York office three... Show More
Over the past decade, the value of the investment grade (IG) corporate bond market has nearly doubled, from USD4.8 trillion in June 2008 to USD9.3 trillion today. Interestingly, the weighting of BBB rated bonds in the IG market has risen at an even quicker pace. Over the same period, issues... Show More
Bonds are typically viewed as a defensive component of an investor's portfolio. They tend to perform best when your riskier assets are doing poorly. Stuart Dear, Deputy Head of Fixed Income at Schroders says the analysis they've conducted shows this relationship has held true in all but one circumstance over... Show More
In the rough and tumble of investment markets its very easy to get distracted: by talk of the next best thing that will make you rich, by the ever-present predictions of an imminent crash, by the worry list that constantly surrounds investment markets relating to growth, profits, interest rates, politics,... Show More
2018 has been, so far, a year of transformational markets driven by populism, politics and policy. Tectonic plates are shifting under the market, and investors are rightly nervous. Despite nearer term fluctuations, U.S. equity markets still remain close to record valuations while looking fatigued. Meanwhile, Quantitative Easing (QE) is being... Show More
In the AFR today I argue that we are not "late-cycle" as so many commonly claim, but rather mid-cycle, which has profound ramifications for how one should optimally allocate capital (AFR subs can click here). Brief excerpt: Show More
The recent uptick in global market volatility has been driven by fears about price pressures and inflation. My colleague, investment director Andy Budden, answers questions about the inflation outlook and reflects on its implications for different asset classes. Show More
In “The Second Machine Age”, Eric Brynjolfsson and Andrew McAfee from MIT, chronologise how quickly technology is changing the world, and posit what the world might look like in the future. "Most fear that technology will replace most jobs. But the analogue and prediction I found most interesting was that... Show More
Once upon a time, the high yield bond market was for speculative companies and investors. Today, the market is where Virgin, Netflix and Hertz raise capital from institutional investors. In this short interview, Vivek Bommi from Neuberger Berman discusses how perception is still catching up with reality in this fast... Show More
If you see a bloke driving a Holden Ute through Sydney with two dogs in the tray and the words 'GIANTZ' blazed on the number plate, that'll be Paul Moore the CIO of PM Capital. The 30-year funds management veteran was an early backer of the GWS Giants and is... Show More
In response to the calamity caused by the GFC, interest rates were cut to near zero and we doubled the amount of debt outstanding. Fast forward and interest rates are now rising at the same time that ~$18 trillion of stimulus is being withdrawn. Show More
Economic growth in most countries continues to print at or above trend. The slack in economies created during the GFC and its aftershocks (Europe in 2011, emerging economies in 2015) is finally being eliminated. Whereas in each of the last few years there was considerable uncertainty about whether central banks... Show More
The ‘balanced’ portfolio has become an institution in the financial world. Equities and bonds are the main ingredients and the ‘mix’ determines the categories of balanced funds commonly used. Here we discuss this approach, and look at another option. Show More
April was a volatile month indeed – or so you would think if you have been following the news. While sensationalised reporting generates readership, a comprehensive assessment of the data often doesn’t support the narrative. Show More
The Australian Commonwealth budget announcement overnight has confirmed the size and trajectory of the Australian government bond market. The Australian Office of Financial Management’s (AOFM) updated issuance plans also indicate that bond supply will remain persistent. This acts to underpin capacity in the bond market for large investors seeking access... Show More