Your Portfolio

Value Investing 101

The moment you invest in the stockmarket, you sign up to participate in what is known as a ‘zero-sum game’ – in essence, for you to make a gain, somebody else has to suffer a loss. That simple idea has some profound implications. It means, if you want to outperform the wider market, it is…

Which is best – passive or active investment management?

Active managers spend a lot of their time rummaging through the mass of investment opportunities within a given market, seeking potentially mispriced assets: those whose fundamental value or bright potential has yet to be fully realised. Passive investing, in contrast, is predicated on the idea that indices themselves provide the most efficient access to a…

Interest rates to remain low

This week Reserve Bank of Australia governor Philip Lowe gave one of the more revealing speeches one is likely to hear from a central banker. It touched on many of the recurring themes in this column – sluggish wage growth, crazy levels of household debt, persistently low inflation, a long period of low interest rates,…

Professional investors forecast year ahead – fixed interest, emerging markets and oil

Central bankers, finance ministers and investors from around the world gathered in Washington, D.C. in April to discuss the global economy at the Spring Meetings of the International Monetary Fund (IMF) and World Bank. The outlook for Emerging Markets (EM) was a recurring theme and the overall mood was subdued, as investors weighed the current…

Choppier waters ahead

The start of 2018 has been anything but ‘business as usual’. Markets were buffeted first by inflation concerns and then trade protectionism. Equities fell and bond yields rose significantly as a result. So is it the beginning of the end for this long bull market cycle or is it the end of the beginning? We…

The rise of active management ETFs

Around the world, Exchange Traded Funds (ETF) assets have enjoyed staggering growth. Their value totalled just US$417 billion in 2005 but reached US$4.4 trillion by 30 September 2017 – a cumulative average growth rate (CAGR) of around 21%. EY global research estimates that ETF assets have the potential to hit US$7.6 trillion within three years,…

Income yields are down, but should you worry?

The last few years have seen a fairly dramatic drop in the income yields obtained from typical balanced (i.e. roughly equal defensive and growth investments) investment portfolios. Reduced interest rates, lower rental yields on property and flat to declining dividend yields on shares mean that many retirees are no longer able to meet living expenses…

Will investors benefit from a reduction in the company tax rate?

The Government has proposed to reduce the large company tax rate from its current 30% to 25% by 2026-27. It argues that the reduction is necessary to keep Australia’s company tax rate internationally competitive and will create “jobs and growth”, ultimately leading to wages growth. It’s been a hard sell, with those opposing the move…

Protecting your portfolio from major downturns

It is nine years after the global financial crisis but we still have ultra-low interest rates. This is great if you are a borrower, but not if you are a saver. If you avoid risk today and invest in interest rate products (cash, term deposits etc), your returns will almost certainly be very low and…

Protecting your portfolio from major downturns

By Michael O’Dea, Head of Multi Asset, Perpetual It is nine years after the global financial crisis but we still have ultra-low interest rates. This is great if you are a borrower, but not if you are a saver. If you avoid risk today and invest in interest rate products (cash, term deposits etc), your…