Is there anything cheap? And liquidity in credit

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)