Johnson: The first real flows of offshore money in five years

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Johnson: The first real flows of offshore money in five years. Steve Johnson, CIO of Forager Funds, says the recent 8% rally in equity markets in CY15 has been fuelled by further PE expansion - rather than improved corporate earnings. It's being driven by lower interest rates and I think that is a very difficult tide to swim against. We are seeing a lot of foreign money coming into the country. Some of my friends who work in the trading space and work with offshore hedge funds are seeing the first big flows into Australia that they have seen for the past five years. Johnson says this flow of money is attracted by falling interest rates and investors seeking out yield. He adds that when you look at the yield on 10 year treasury bonds compared to the earnings yield of the market it is very difficult to see that trend changing - particularly if there are further rate cuts. In this video he discusses The Banks, Telstra and risks.

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