The typical Australian investment portfolio is largely split between cash/government bonds and equities, with a strong domestic focus. Safety and familiarity are the appeals here. Focusing on these two extreme ends of the investment spectrum has worked beautifully well over recent decades. Both equities and cash/government bonds provided returns comfortably... Show More
We sat down with Simon Doyle, Head of Fixed Income & Multi-Asset at Schroders, and asked him how he would allocate a million dollars today. In his responses to this tough question he made it clear that it’s not a good time to be building a big position in equities. Show More
Overnight falls of 3.2% for the DOW (3.30% for S&P, 4.40% NASDAQ) are reminiscent of January-February 2018, and just like then it feels very unpleasant. However as always perspective is required when trying to ascertain whether this is a transitionary correction or the start of something more sinister. Show More
The US Federal Reserve (the Fed) lifted interest rates to 2.25% as was widely expected in September and commented that monetary policy is no longer ‘accommodative’. Show More
Chris Rands, Portfolio Manager at Nikko Asset Management, believes that rates are unlikely to rise significantly from current levels. With debt at very high levels across the world, servicing that debt would raise major challenges, which could steady the hand of central bankers. Show More
When looking for potential problems in a company, the first place to look is the balance sheet. Amit Lodha, Portfolio Manager at the Fidelity Global Equities Fund, says that when looking for problems in the equity markets, investors should watch the markets’ ‘balance sheet’ – fixed income markets. Show More
This time last year, at Livewire Live we flagged a likely resurgence of volatility and highlighted some of the factors that we believed would drive this. In this exclusive report for Livewire, I review the thesis and explain why we expect much more extreme reactions going forward. 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
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 allocation in portfolios, however, in a world of rising interest rates, there are concerns about the impact this will have on fixed income returns. Stuart Dear, Deputy Head of Fixed Income at Schroders explains that the dominant driver of bond returns is the... Show More
April nineteen sixty eight. Fifty years ago. It was perhaps the first mainstream introduction to fictional Artificial Intelligence (AI) when we met ‘HAL 9000’, the supercomputer controlling the spacecraft Discovery in Arthur C Clarke and Stanley Kubrick’s confounding sci-fi epic 2001: A Space Odyssey. HAL was an early exercise in... 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
Schroders Australia has completed its third broker insights survey, diving into how brokers are investing. Volatility has pushed the need to protect capital to the top of the priority list. Show More
April was a very interesting month in respect of the continuing pressure on the price of financial assets. Globally economic data moderated over April which has been framed as an expected deceleration from the exceptionally strong pace of Q417, however if we look at the macro economic surprise indices which... Show More
In the video below, taken from the recent PM Capital Adviser Forum, Chief Investment Officer Paul Moore discusses why equities still stack up versus other asset classes, particularly government bonds. He also comments on modern asset allocation and why advisers and their clients need to think differently. Show More
Investors hunting for yield from listed companies today face unreliable yields, and falling capital values as rates creep higher, as well as new additional risks posed by government policies. However, investors can diversify their income and access comparable yields from other parts of the market not exposed to such headwinds. Show More
The domestic Residential Mortgage-Backed Securities (RMBS), and broader securitisation market has historically been restricted to institutional investors. However, the Gryphon Capital Income Trust (GCIT) offers a unique investment opportunity in providing exposure to this market for retail investors. Show More
Over the years, we’ve presented a range of sample portfolios to new and existing clients on the types of fixed income investments available. Our Australian dollar investment grade portfolio was developed by our Portfolio Strategy and Research teams to show an example portfolio and the associated yields on offer. Show More
Despite the complex name, securitization is a simple concept. Securitization is taking an illiquid pool of assets and converting them to liquid securities. Securitization got a bad rap in the wake of the GFC, but in Australia, there are important differences to the “sub-prime” market in the USA. This video... Show More
Although much of the focus remains on the February market activity, a tipping point between unemployment and inflation in the US approaches and so inflation remains a key risk. February revealed the first cracks in the relative market stability of the last year, as higher inflation fears both drove bond... Show More