One table we can't do without
Nick Morton
Resonant Asset Management
Deciding on where to allocate capital has seldom been much harder, as we traverse global financial markets replete with conflicting messages, political uncertainty, and collapsing rates.
As fluctuating sentiment has the potential to drag us left and right, having the right decision tools and processes is vital to stay anchored and consistent, but remain flexible and nimble.
One key table we are using at the moment focuses on the sensitivity of asset classes and sub-sectors to falling rates. It is the key table at the moment, and an essential part of our current decision making process.
The impact of rates is littered with contradictions and opposing forces. For instance, a fall in rates is both potentially a positive for equities (via a drop in the discount rate), and a negative (via the implication of a deteriorating economic environment).
In the table below, we codify every asset class and sub-class in terms of its Rate Sensitivity (a '++' indicates a strong beneficiary of a falling rate environment, '0' no impact, and '--' a strong negative detractor), and Growth Sensitivity.
click below on the image to enlarge
Never miss an update
Enjoy this wire? Hit the ‘like’ button to let us know.
Stay up to date with my current content by
following me below and you’ll be notified every time I post a wire
Nick has over 20 years of experience in markets, including 7 years at Citigroup as Head of Australian Quant Research, and 2 years at the CFS GAM Australian Core equities fund. He is CIO and co-PM of Resonant’s multi-asset SMA’s with direct stocks.
........
Resonant Asset Management Pty Ltd ABN 41 619 513 076, AFSL No 511759. Resonant is not licensed to provide personal financial advice to retail clients. The Information within this wire does not constitute personal financial advice. In preparing this document, Resonant has not taken into account your particular goals and objectives, anticipated resources, current situation or attitudes. You should therefore consider the appropriateness of the material, in light of your own objectives, financial situation or needs, before taking any action. You should also obtain a copy of the PDS of all products referenced before making any decisions. The data, information and research commentary in this document ("Information") may be derived from information obtained from other parties which cannot be verified by Resonant and therefore is not guaranteed to be complete or accurate, and Resonant accepts no liability for errors or omissions. Resonant does not guarantee the performance of any fund, stock or the return of an investor's capital. Past performance is not a reliable indicator of future performance.
2 topics
Nick Morton
Co-Portfolio Manager
Resonant Asset Management
Nick has over 20 years of experience in markets, including 7 years at Citigroup as Head of Australian Quant Research, and 2 years at the CFS GAM Australian Core equities fund. He is CIO and co-PM of Resonant’s multi-asset SMA’s with direct stocks.
Expertise
Nick Morton
Co-Portfolio Manager
Resonant Asset Management
Nick has over 20 years of experience in markets, including 7 years at Citigroup as Head of Australian Quant Research, and 2 years at the CFS GAM Australian Core equities fund. He is CIO and co-PM of Resonant’s multi-asset SMA’s with direct stocks.
Expertise
Comments
Comments
Sign In or Join Free to comment