Is there anything cheap? And liquidity in credit

Christopher Joye

Coolabah Capital

In The AFR I explain why I have lifted the cash weights in my own portfolios from ~15% in February to ~50% today and investigate whether there are any cheap asset-classes left after global risk-free rates have been crushed to the lowest levels in human history. I conclude that Australian equities, US equities, sovereign bonds, residential property and commercial property all look expensive while both investment-grade Australian credit and equities volatility appear quite cheap. Indeed, the VIX index, which tracks expectations for S&P500 volatility over the next 12 months, is close to its lowest levels ever recorded since 1990. A question that is often asked about investment-grade credit is the level of secondary liquidity and I present detailed analysis of this subject borrowing from information recently released by the RBA on the volume of turnover in the over-the-counter corporate bond market. Free (VIEW LINK)


Christopher Joye
Portfolio Manager & Chief Investment Officer
Coolabah Capital

Chris co-founded Coolabah in 2011, which today runs $7 billion with a team of 33 executives focussed on generating credit alpha from mispricings across fixed-income markets. In 2019, Chris was selected as one of FE fundinfo’s Top 10 “Alpha...

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