AMP Capital’s new exchange traded managed fund, the Dynamic Markets Fund (Hedge Fund), uses five key considerations as part of the dynamic asset allocation investment process. These include asset valuations, stage of the earnings cycle, liquidity and monetary policy, market sentiment, and also technical signals. This process has uncovered an opportunity emerging in European and Japanese banks, which are looking cheap trading at book values of 0.6 and 0.5 respectively; compared to 2.0 for Australian banks. While they have experienced margin pressure due to the effects of QE, some steepening of the yield curve may be about to take the pressure off. So things may be getting ‘less bad’, just as pessimism is at its worst. In this video, Nader Naeimi, Head of Dynamic Markets expands on this potential opportunity, and identifies a significant opportunity appearing in the Australian market.
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