Investors might be forgiven thinking the yield traded has already peaked for the year

Investors might be forgiven thinking the yield traded has already peaked for the year. It all seemed so straightforward in January. The RBA was going to cut, and cut again. Banks, Telstra, utilities, infra stocks and property developers and trusts; it all went up in a flash. By February share price gains in many instances clocked close to 20%, and no dividends had as yet been paid out! Things have gone a bit pear-shaped since. Those near-20% gains have shrunk to low single digits since. Admittedly, half-yearly dividends have been paid out, but there's no denying traditional yield stocks have been out of favour lately, underperforming an already wobbly looking equities market. So with the US Fed about to change direction, is this the end of the all-conquering yield trade? The short answer is No. The yield trade is not dead, but it is changing shape. And for good reasons. My Weekly Insights: (VIEW LINK)


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