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| Index Selector Links | 1 Year | 3 Year | 5 Year |
|---|---|---|---|
-8.38% |
9.35% |
2.86% |
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-1.24% |
8.70% |
5.50% |
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-0.29% |
9.29% |
5.29% |
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5.99% |
15.83% |
6.35% |
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5.67% |
15.18% |
8.32% |
|
8.49% |
13.84% |
8.83% |
|
7.24% |
14.15% |
6.09% |
|
7.70% |
12.65% |
7.05% |
|
4.45% |
8.86% |
5.43% |
|
9.29% |
8.91% |
7.94% |
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-18.73% |
24.80% |
9.88% |
|
2.95% |
5.22% |
3.01% |
|
0.97% |
5.03% |
1.62% |
|
8.62% |
9.14% |
7.74% |
|
4.96% |
7.20% |
6.10% |
|
8.14% |
8.30% |
7.92% |
|
-8.36% |
2.15% |
-1.08% |
|
2.41% |
11.17% |
7.43% |
Hedge Clippings
Australia's economy is slowing. Unfortunately, inflation appears reluctant to follow.
23 Oct 2026 - Hedge Clippings |23 October 2026
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Hedge Clippings | 23 October 2026 Slowing down, but still running hot Australia's economy is slowing. Unfortunately, inflation appears reluctant to follow. That leaves the Reserve Bank contemplating another interest rate increase, the Treasurer preparing weaker growth forecasts, and households wondering how much more slowing they are supposed to accommodate. Speaking at today's Citi A50 Australian Economic Forum, Jim Chalmers acknowledged that higher inflation and interest rates would probably mean softer growth and slightly higher unemployment. There was an encouraging qualification: Treasury now expects business investment growth this financial year could exceed 5%, compared with May's forecast of 2.5%. The economy is losing momentum unevenly, with investment providing support while households feel the squeeze. Two days earlier, RBA Deputy Governor Andrew Hauser delivered the less comforting side of that picture. The inflation outlook had become "materially worse" than anticipated in August. Higher oil prices, strong AI-related demand and domestic capacity constraints were all contributing. More concerning was evidence that some businesses increasingly regarded inflation of 3-3½% as normal. Once that expectation influences pricing decisions, bringing inflation down becomes harder. The Treasurer and the RBA can therefore both be right about slowing growth. The disagreement is over how much slowing is necessary, and which policies should deliver it. Chalmers emphasised today that public demand growth had halved last financial year while private demand growth had tripled. That is relevant. It does not, however, settle whether government spending is adding to inflationary pressure. Slower growth in spending still leaves spending growing. And its effect depends on the economy's ability to supply the workers, materials and services being purchased. When capacity is constrained, public spending competes for resources alongside private spending. The RBA responds to the total. Nor does public demand capture the entire fiscal picture. Tax cuts and transfers affect household purchasing power without all appearing as government purchases in the national accounts. The RBA itself notes that budget balances provide a broader indication of fiscal policy's effect because they incorporate taxes and transfers as well as spending. May's Budget projected Commonwealth cash payments of 26.8% of GDP and an underlying cash deficit of $31.5 billion, or 1% of GDP, for 2026 - 27. Those are forecasts awaiting December's update. Neither figure tells us precisely how much inflation fiscal policy causes, and a deficit alone does not establish that policy is becoming more expansionary. But the scale of spending deserves scrutiny alongside the Treasurer's emphasis on its slowing growth. The fair criticism is that fiscal restraint could share more of the work currently being done by interest rates. The government cannot control world oil prices. It can control spending priorities, the targeting of assistance, and whether new commitments are offset elsewhere. Productivity-enhancing investment can expand supply over time, although construction spending adds demand before those benefits arrive. That creates an uncomfortable political choice. Broad relief is popular, but it supports spending when the RBA is trying to restrain it. Better-targeted assistance and credible savings offer a more disciplined response. Claims that Canberra caused all inflation are implausible; the Treasurer's suggestions that its choices have little bearing on the task are equally unconvincing. The housing market shows how uncomfortable this combination has become. Domain's September Quarter House Price Report, released on Thursday, recorded falling median house prices in every capital city - the first simultaneous decline in 15 years. Combined capital city house prices fell 4.7% over the quarter. Domain identified higher interest rates, persistent living costs and changes to housing investment taxes as contributing pressures, with investors pulling back. Albanese and Chalmers may be tempted to present cheaper houses as evidence that their affordability policies are working. Before claiming victory, they should consider whether prospective buyers can actually afford the repayments. Lower prices reduce the deposit and loan required, which certainly helps. But higher mortgage rates reduce borrowing capacity, while persistent inflation eats into the income available to service the loan. For buyers dependent on substantial borrowing, those pressures can swallow the benefit of a cheaper purchase price. Affordability involves more than the number on the sales contract. Meanwhile, existing homeowners face the other side of the equation: falling property values erode their equity, even as repayments remain elevated. Recent buyers with small deposits are particularly exposed. The downturn was already underway before May's Budget, so Canberra cannot claim - or be assigned - all the responsibility. Its tax changes have nevertheless added another pressure to an already weakening market. A smaller deposit hurdle for tomorrow's buyer, a larger repayment burden, and less equity for today's owner. "Thank you, Albanese" may not be quite the electoral endorsement the government had in mind. For fund investors, that uncertainty now has a particularly tangible counterpart. Last week's Hedge Clippings covered the reliability of private asset valuations following the Firmus "fiasco" (which we expect still has a long way to run). This week MA Financial announced that its $106 million MA Secured Real Estate Income Fund would be wound up. Its principal underlying investment, the MA Secured Loan Series, will suspend redemptions from 31 October until at least 31 March 2027. The retail fund's outstanding redemption requests lose their previous priority, with investors instead participating proportionately in the wind-up. MA also cited an insufficient sustainable scale. The notice does not establish investors' ultimate loss, but it establishes that access to their money has changed substantially. The issues facing private credit for real estate and property development are real, but need to be viewed as a separate sector from commercial and corporate private credit lending. While both are subject to valuation concerns and potential liquidity mismatches, the other issues each face are significantly different. Going forward, FundMonitors.com will be allocating the latter to a new Peer Group consisting solely of Corporate Private Credit to give investors and advisors a clear differentiation between the two. Next Wednesday's inflation release will sharpen the debate before the RBA meets in the first week of November for their "Cup Day" meeting. Persistent inflation, followed by a further rate rise will only add to the government's flagging electoral support. News | Insights Quarterly State of Trend report - Q3 2026 | East Coast Capital Management Market Commentary | Glenmore Asset Management September 2026 Performance News |
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16 Oct 2026 - Hedge Clippings |16 October 2026
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Hedge Clippings | 16 October 2026
News | Insights Manager Insights | Princeton Financial Services The 60/40 portfolio isn't broken - it was always incomplete | East Coast Capital Management The fuel price drag continues | Magellan Investment Partners September 2026 Performance News Insync Global Capital Aware Fund Seed Funds Management Financial Income Fund - Incl Franking |
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9 Oct 2026 - Hedge Clippings | 09 October 2026
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Hedge Clippings | 09 October 2026 The Fed, the RBA and the Politics of Higher Rates Those hoping September's US interest-rate increase was a one-off probably found little comfort in this week's release of the Federal Reserve minutes. The Fed raised its target range by 25 basis points to 3.75 to 4.00% in September, with every voting member in favour. More importantly, most participants thought another increase would probably be appropriate before year-end. Several judged the current rate to be either not restrictive, or only mildly restrictive. That doesn't necessarily mean another rise at the Fed's October meeting due at the end of the month. Governor Christopher Waller said this week there was flexibility over timing, and other Fed officials have indicated December may be more likely. But that rather misses the larger point: the debate has shifted from whether rates have peaked to how much more tightening might be needed, and how quickly. The reasons should sound familiar to Australians. The Fed is worried that inflation remains too persistent. Higher energy prices resulting from the Middle East conflict are part of the problem, but not all of it. Officials also pointed to resilient domestic demand, the extraordinary AI investment boom, rising business costs and evidence that companies have become more successful at passing those costs on to consumers. Short-term inflation expectations are elevated as well. And that matters because central banks can live with temporary inflation shocks; what they fear is those shocks becoming embedded in wages, prices and expectations. Unfortunately for Trump, the calendar isn't especially helpful The US midterm elections are on November 3rd. Trump isn't personally on the ballot, but control of Congress is, and presidents inevitably wear a fair amount of political responsibility for the economy. That makes higher rates awkward. Mortgage repayments, credit cards, car finance and business borrowing are exactly the sort of things voters notice directly. And in car mad America, fuel prices are probably top of the list. And the political backdrop is already uncomfortable. A Reuters/Ipsos poll released this week put Trump's approval rating at 32% and found a substantial enthusiasm gap between people who voted for Kamala Harris in 2024 and Trump voters heading into the midterms. That isn't an election forecast, but it demonstrates how important the economy and cost of living have become politically. Trump, of course, wants much lower interest rates. Yet the Fed is signalling that inflation may require still more restraint. There is an uncomfortable circularity here. Trump wants lower rates because they would ease pressure on households and support economic activity. The Fed is keeping rates high because inflation remains too high. And some of the risks identified by the Fed, energy prices, tariffs and the investment boom associated with AI infrastructure, are not problems monetary policy can solve directly. The Fed cannot produce more oil, settle geopolitical conflicts or build more generating capacity. What it can do is suppress demand sufficiently to stop those price increases spreading through the rest of the economy. Which is exactly what central banks do, however politically inconvenient. Meanwhile, back in Australia... The comparison is striking. The RBA has now increased Australia's cash rate four times during 2026, from 3.60% at the beginning of the year to 4.60% following September's increase. And Michele Bullock's explanation could almost have been written in Washington. Inflation was already too high before the latest energy shock. Domestic spending and investment had been stronger than expected, productivity remained weak, the labour market was still somewhat tight and businesses were reporting cost pressures which they were increasingly passing on to customers. Then came sharply higher global energy prices and rising prices for technology-related goods associated with the AI boom. So perhaps the lesson from both central banks is essentially the same: Energy may have poured petrol on the inflation fire, but it didn't light the match. Both the Fed and the RBA are worried that a series of supposedly temporary shocks is turning into persistent inflation. And both appear prepared to keep policy restrictive rather than risk allowing inflation expectations to become entrenched again. For investors, that argues against assuming that the next move must be down simply because rates have already risen sharply. The Fed minutes leave another US increase this year very much alive. In Australia, the RBA will increasingly want to see what four hikes have already done to housing, household spending and demand. But if inflation refuses to cooperate, the Board has made it perfectly clear that returning inflation to target comes first. Albo might want to take note And then there is the politics. Anthony Albanese might reasonably take an interest in what is happening to Trump, even though the two political situations are obviously very different. Australia's next federal election is expected in 2028. Or about 18 months away. That sounds like plenty of time. Albanese's immediate difficulty is that with a volatile electorate, even many labour voters have lost faith in him. A recent RedBridge/Accent poll put his net favourability at minus 27, Labor's primary vote at 28%, and One Nation at 29%. A broader polling aggregation similarly has Labor and One Nation virtually level on primary vote, although Labor currently retains a narrow two-party-preferred lead over the Coalition. That alone is an extraordinary change from the political landscape at the last election. The government's opponents will continue to prosecute claims of broken election promises and attack Jim Chalmers' budget and tax changes. Labor will argue that global inflation, energy costs and external shocks have played a significant part in the economic squeeze. Ultimately, voters will decide which explanation they believe. But the economic reality is harder to miss, and ultimately the responsibility of the government. If inflation stays sticky, interest rates stay higher for longer. If rates remain higher, mortgage holders, businesses and consumers feel the pain. And if economic activity slows sufficiently to bring inflation down, the government then has to deal with weaker growth and potentially higher unemployment, and the possibility of a recession. None of those is particularly attractive eighteen months out from an election. Then there is Pauline Hanson and One Nation. At the last federal election, the suggestion that One Nation might be competing with Labor for the largest national primary vote would have seemed fanciful. Today it is showing up in actual polling. Whether that persists is another matter entirely, but its emergence changes the political equation for both major parties. Trump is discovering that an economy can look reasonably resilient in the national statistics while it still feels uncomfortable around the kitchen table or at the petrol station. Albanese has considerably longer before Australians vote again, but he faces much the same risk: voters tend to experience the economy through their mortgage, grocery bill and household budget rather than through GDP statistics or Treasury forecasts. As Harold Wilson is reputed to have observed, "a week is a long time in politics". If that's right, eighteen months is a very long time indeed. News | Insights AI, Inflation and a record IPO: Decoding the ASX reporting season | Magellan Investment Partners September 2026 Performance News |
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26 Oct 2026 - Performance Report: Cyan C3G Fund
[Current Manager Report if available]
26 Oct 2026 - Airlie Australian Share Fund quarterly update
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Airlie Australian Share Fund quarterly update Airlie Funds Management October 2026 (Viewing time: 22 mins) |
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Portfolio Managers Emma Fisher and Ray David provide a quarterly update on the Airlie Australian Share Fund. Emma discusses the market volatility that continued through the period, including the September sell-off as global bond yields spiked, and explains the decision to re-enter CSL in August. She also shares her takeaways from a recent US trip, including the AI infrastructure build-out, pressure on interest rate-sensitive sectors and the case for patience with cyclicals such as James Hardie. Ray presents the investment case for the new position in Dyno Nobel and outlines Airlie's view on the Firmus IPO. Key takeaways
Funds operated by this manager: Airlie Australian Share Fund Active ETF (ASX:AASF) Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 trading as Airlie Funds Management ('Airlie') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to an Airlie financial product or service may be obtained by calling +61 2 9235 4760 or by visiting www.airliefundsmanagement.com.au. Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of an Airlie financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. Airlie makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Airlie. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Airlie will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material. Any third party trademarks contained herein are the property of their respective owners and Airlie claims no ownership in, nor any affiliation with, such trademarks. Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Airlie. |
23 Oct 2026 - Performance Report: ECCM Systematic Trend Fund
[Current Manager Report if available]
22 Oct 2026 - Spreads are tight. That doesn't make sterling credit expensive.
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Spreads are tight. That doesn't make sterling credit expensive. abrdn September 2026 (3-Minute Read) I keep hearing the same argument: sterling investment-grade credit spreads are near their tightest point in this cycle, so these bonds must be expensive. I have made the argument myself. But I'm no longer convinced it tells the whole story. A spread is the extra yield a company bond offers over a comparable government bond. For higher-quality sterling-denominated corporate debt, that extra yield is around 0.9%. Bonds prices rise when yields fall and fall when yields rise. Since 2009, the spread has been narrower at a quarter-end on only three occasions. The long-term average at the end of each quarter is about 1.6%. On that measure alone, I can see why sterling credit looks expensive. But I don't think the spread captures the full picture. It's only the extra reward for taking credit risk, not the bond's total starting yield, and the total yield has changed significantly. The spread is only part of the yieldAt the end of 2021, sterling investment-grade bonds yielded 2.06%. The spread over government bonds was 1.14%, accounting for more than half the total yield. Today, this market yields 6.15%. The spread is only 0.9% and represents less than 15% of the total. That means the underlying government-bond component accounts for roughly the other 85%. The spread still matters. It compensates investors for risks including downgrades, defaults and difficulty selling bonds in stressed markets. But I don't see it as the only number shaping the outcome. When government bonds yielded some 1%, the spread had to do most of the work of attracting investors. Today, government-bond yields provide most of the income, even before investors take on additional credit risk. Higher income provides a larger cushionHigher starting income from coupon payments can also provide more protection when markets move against investors. Sterling investment-grade bonds, with an average tenor of around 5.5 years, now yield more than 6%. If government-bond yields remained unchanged, spreads would have to widen by about 1.1 percentage points (doubling from 0.9% to around 2%) to wipe out a year's worth of income. At the end of 2021, these bonds had an average maturity of some eight and a half years and yielded about 2%. A spread widening of roughly 0.25 percentage points would have erased the income. This is an illustration, not a forecast. But it shows why two periods with tight spreads can present different risks. Today's higher income provides a much larger cushion. Tight spreads don't settle the argumentNone of this makes sterling credit cheap. Company bonds offer less extra reward for credit risk than they have historically. I still don't see enough value in some areas of this market. But high overall yields and tight spreads can coexist. Both statements are true, even though one tends to dominate the conversation. I'd urge you to ask how much total yield you're getting, as well as how far spreads would need to rise before absorbing a year's income. Viewed this way, sterling investment-grade credit looks less stretched than a conventional spread analysis would suggest. I'm not arguing for taking substantially more credit risk. But I've stopped treating 'spreads are at their tightest' as an automatic reason to sell. The most expensive mistake in credit this cycle may not be owning tight spreads. It may be selling 6% income because one chart told us to. Data source: Bloomberg Sterling Aggregate Corporate Index, including option-adjusted spread, yield and duration, and UK 10-year generic gilt yield. Data to 29 September 2026. Note: All views are those of the author. |
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Funds operated by this manager: abrdn Sustainable Asian Opportunities Fund , abrdn Emerging Markets Equity Fund , abrdn Sustainable International Equities Fund , abrdn Global Corporate Bond Fund (Class A) |
21 Oct 2026 - Performance Report: Altor AltFi Income Fund
[Current Manager Report if available]
21 Oct 2026 - Decoding climate risk: Harnessing data and models for sustainable solutions
Decoding climate risk: Harnessing data and models for sustainable solutions20 Oct 2026 - Quarterly State of Trend report - Q3 2026
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Quarterly State of Trend report - Q3 2026 East Coast Capital Management October 2026 3-minute read In this update we present the quarterly State of Trend report for Q3 2026. Our report covers the performance of trend following systems compared with traditional investments such as the S&P/ASX 200 Total Return index, and the Australian 60/40 portfolio. Trend following provides exposure to a diverse pool of underlying instruments, and implements trading strategies systematically and without emotional biases. Trend followers pull ahead as the bond sell-off stalls conventional asset classes
Key market movements in Q3 2026
Featured chart - UK Natural Gas
See the full report at our website. Funds operated by this manager: |
markets pushed higher during the month of September. (2-minute read)
19 Oct 2026 - Glenmore Asset Management - Market Commentary
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Market Commentary - September Glenmore Asset Management October 2026 (2-minute read) Despite an extremely volatile reporting season, global equity markets pushed higher during the month. In the US, the S&P 500 and NASDAQ rose +1.9% and +1.6%, respectively, whilst in the UK, the FTSE edged +0.6% higher. Domestically, the ASX All-Ordinaries Accumulation index outperformed its international peers, increasing +3.2%. This was driven by the Materials sector (led by the gold sector) and Consumer Discretionary, supported by expectations of further rate cuts. The expectation of further cuts by the RBA provided a material boost to small caps, with the ASX Small Ordinaries index rising +8.2% in the month. In comparison, the ASX 100 rose +2.1%, weighed down by sharp falls in large-cap names such as James Hardie (-25%), CSL (-21%), Dominoes (-18%), Reece (-18%), Wisetech Global (-15%) and Woolworths (-9%). In bond markets, the US 10-year bond yield declined -15 basis points (bp) to 4.23%, whilst its Australian counterpart rose marginally by +2bp to close at 4.28%. The Australian dollar was stronger in June, closing at US$0.654, rising 1.2 cents. Funds operated by this manager: |
16 Oct 2026 - Performance Report: Glenmore Australian Equities Fund
[Current Manager Report if available]
15 Oct 2026 - Performance Report: Airlie Australian Share Fund Active ETF (ASX:AASF)
[Current Manager Report if available]
26 Oct 2026 - Airlie Australian Share Fund quarterly update
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Airlie Australian Share Fund quarterly update Airlie Funds Management October 2026 (Viewing time: 22 mins) |
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Portfolio Managers Emma Fisher and Ray David provide a quarterly update on the Airlie Australian Share Fund. Emma discusses the market volatility that continued through the period, including the September sell-off as global bond yields spiked, and explains the decision to re-enter CSL in August. She also shares her takeaways from a recent US trip, including the AI infrastructure build-out, pressure on interest rate-sensitive sectors and the case for patience with cyclicals such as James Hardie. Ray presents the investment case for the new position in Dyno Nobel and outlines Airlie's view on the Firmus IPO. Key takeaways
Funds operated by this manager: Airlie Australian Share Fund Active ETF (ASX:AASF) Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 trading as Airlie Funds Management ('Airlie') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to an Airlie financial product or service may be obtained by calling +61 2 9235 4760 or by visiting www.airliefundsmanagement.com.au. Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of an Airlie financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. Airlie makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Airlie. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Airlie will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material. Any third party trademarks contained herein are the property of their respective owners and Airlie claims no ownership in, nor any affiliation with, such trademarks. Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Airlie. |
22 Oct 2026 - Spreads are tight. That doesn't make sterling credit expensive.
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Spreads are tight. That doesn't make sterling credit expensive. abrdn September 2026 (3-Minute Read) I keep hearing the same argument: sterling investment-grade credit spreads are near their tightest point in this cycle, so these bonds must be expensive. I have made the argument myself. But I'm no longer convinced it tells the whole story. A spread is the extra yield a company bond offers over a comparable government bond. For higher-quality sterling-denominated corporate debt, that extra yield is around 0.9%. Bonds prices rise when yields fall and fall when yields rise. Since 2009, the spread has been narrower at a quarter-end on only three occasions. The long-term average at the end of each quarter is about 1.6%. On that measure alone, I can see why sterling credit looks expensive. But I don't think the spread captures the full picture. It's only the extra reward for taking credit risk, not the bond's total starting yield, and the total yield has changed significantly. The spread is only part of the yieldAt the end of 2021, sterling investment-grade bonds yielded 2.06%. The spread over government bonds was 1.14%, accounting for more than half the total yield. Today, this market yields 6.15%. The spread is only 0.9% and represents less than 15% of the total. That means the underlying government-bond component accounts for roughly the other 85%. The spread still matters. It compensates investors for risks including downgrades, defaults and difficulty selling bonds in stressed markets. But I don't see it as the only number shaping the outcome. When government bonds yielded some 1%, the spread had to do most of the work of attracting investors. Today, government-bond yields provide most of the income, even before investors take on additional credit risk. Higher income provides a larger cushionHigher starting income from coupon payments can also provide more protection when markets move against investors. Sterling investment-grade bonds, with an average tenor of around 5.5 years, now yield more than 6%. If government-bond yields remained unchanged, spreads would have to widen by about 1.1 percentage points (doubling from 0.9% to around 2%) to wipe out a year's worth of income. At the end of 2021, these bonds had an average maturity of some eight and a half years and yielded about 2%. A spread widening of roughly 0.25 percentage points would have erased the income. This is an illustration, not a forecast. But it shows why two periods with tight spreads can present different risks. Today's higher income provides a much larger cushion. Tight spreads don't settle the argumentNone of this makes sterling credit cheap. Company bonds offer less extra reward for credit risk than they have historically. I still don't see enough value in some areas of this market. But high overall yields and tight spreads can coexist. Both statements are true, even though one tends to dominate the conversation. I'd urge you to ask how much total yield you're getting, as well as how far spreads would need to rise before absorbing a year's income. Viewed this way, sterling investment-grade credit looks less stretched than a conventional spread analysis would suggest. I'm not arguing for taking substantially more credit risk. But I've stopped treating 'spreads are at their tightest' as an automatic reason to sell. The most expensive mistake in credit this cycle may not be owning tight spreads. It may be selling 6% income because one chart told us to. Data source: Bloomberg Sterling Aggregate Corporate Index, including option-adjusted spread, yield and duration, and UK 10-year generic gilt yield. Data to 29 September 2026. Note: All views are those of the author. |
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Funds operated by this manager: abrdn Sustainable Asian Opportunities Fund , abrdn Emerging Markets Equity Fund , abrdn Sustainable International Equities Fund , abrdn Global Corporate Bond Fund (Class A) |
15 Oct 2026 - Manager Insights | Princeton Financial Services
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Chris Gosselin, CEO of Fundmonitors.com, speaks with Craig Anderson, Executive Director at Princeton Financial Services, about the firm's approach to property-backed lending and the challenges facing Australia's private credit sector. They discussed Princeton's focus on first mortgage lending, risk management, investor liquidity and the importance of transparency in an increasingly scrutinised market. Funds operated by this manager: Princeton Property Income Fund
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6 Oct 2026 - AI, Inflation and a record IPO: Decoding the ASX reporting season
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AI, Inflation and a record IPO: Decoding the ASX reporting season Magellan Investment Partners September 2026 (Listening time: 30 mins) |
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What did the latest reporting season reveal about the state of the Australian share market, and could the ASX's potentially biggest IPO in decades, Firmus Technologies, reshape the picture? In this episode of In The Know, Magellan's Head of Distribution, Mark Burgess, is joined by Ray David, Portfolio Manager, and David Meehan, Investment Analyst, from Airlie Funds Management to unpack the results and the forces shaping the ASX. They breakdown why Airlie remains cautious on the banks, the companies that stood out for the right, and wrong reasons, and where market reactions may be creating opportunities for long-term investors. They also explore the impact of the global AI capital cycle, persistent inflation and higher interest rates, and whether the shifts seen this reporting season represent something more enduring than short-term market noise. |
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Funds operated by this manager: Vinva Global Alpha Fund - Active ETF (ASX: V1AC) , Vinva Australian Equity Fund , Vinva Global Equity Fund , Vinva Australian Alpha Extension Fund , Vinva Global Alpha Extension Fund - Class A , Magellan Infrastructure Fund , Magellan Global Opportunities Fund No.2 , Magellan Infrastructure Fund (Unhedged) , Magellan Core Infrastructure Fund , Magellan Global Opportunities Fund Active ETF (ASX:OPPT) Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 trading as Magellan Investment Partners ('Magellan Investment Partners') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to a Magellan Investment Partners financial product may be obtained by calling +61 2 9235 4888 or by visiting www.magellaninvestmentpartners.com Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan Investment Partners financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. No guarantee is made that such information is accurate, complete or timely and no warranty is given regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan Investment Partners or the third party responsible for making those statements (as relevant). Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan Investment Partners will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material. Any third-party trademarks contained herein are the property of their respective owners and Magellan Investment Partners claims no ownership in, nor any affiliation with, such trademarks. Any third-party trademarks contained herein are the property of their respective owners, are used for information purposes and only to identify the company names or brands of their respective owners, and no affiliation, sponsorship or endorsement should be inferred from such use. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan Investment Partners. (080825-#W17) |
2 Oct 2026 - The AI data centre backlash: can the boom survive contact with local politics?
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The AI data centre backlash: can the boom survive contact with local politics? abrdn September 2026 (49-minute listen) As investment in artificial intelligence (AI) infrastructure surges, local opposition is growing too, driven by concerns over energy demand, water consumption, visual impact and noise. To explore these issues, Paul and Lizzy are joined by Nancy Hardie from Aberdeen's sustainability team and Tim O'Reilly from data centre developer Tritax. Together they discuss the economics, politics and geopolitics of the AI infrastructure buildout. Is opposition to data centre construction a risk to the 'AI trade'? Is this backlash a stand-in for broader societal concerns about who benefits from, and who pays for, the AI revolution? And what does responsible data centre construction look like in practice? Some highlights:
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Funds operated by this manager: abrdn Sustainable Asian Opportunities Fund , abrdn Emerging Markets Equity Fund , abrdn Sustainable International Equities Fund , abrdn Global Corporate Bond Fund (Class A) |
14 Sep 2026 - What the headlines are missing on private credit
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What the headlines are missing on private credit Magellan Investment Partners August 2026 (Viewing time: 30 mins) |
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Asset-backed credit is a well-established part of Australia's lending market, but it operates quite differently from corporate and real estate private credit that has attracted much of the recent attention. In this episode of In The Know, Simon Brinsmead from Barrenjoey is joined by Eric Williamson, Head of Private Credit Investments and Eva Zileli, Senior Fund Manager, Credit, from Barrenjoey Private Capital. They explain how asset-backed lending works, the residential mortgages and other financial assets underpinning these investments, and the layers of protection built into securitisation structures. They also examine Australia's non-bank lending sector, how they assess credit quality and risk, and the role asset-backed credit can play within a diversified portfolio. |
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Funds operated by this manager: Vinva Global Alpha Fund - Active ETF (ASX: V1AC) , Vinva Australian Equity Fund , Vinva Global Equity Fund , Vinva Australian Alpha Extension Fund , Vinva Global Alpha Extension Fund - Class A , Magellan Infrastructure Fund , Magellan Global Opportunities Fund No.2 , Magellan Infrastructure Fund (Unhedged) , Magellan Core Infrastructure Fund , Magellan Global Opportunities Fund Active ETF (ASX:OPPT) Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 trading as Magellan Investment Partners ('Magellan Investment Partners') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to a Magellan Investment Partners financial product may be obtained by calling +61 2 9235 4888 or by visiting www.magellaninvestmentpartners.com Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan Investment Partners financial product or service may differ materially from those reflected or contemplated in such forward-looking statements. This material may include data, research and other information from third party sources. No guarantee is made that such information is accurate, complete or timely and no warranty is given regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan Investment Partners or the third party responsible for making those statements (as relevant). Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan Investment Partners will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material. Any third-party trademarks contained herein are the property of their respective owners and Magellan Investment Partners claims no ownership in, nor any affiliation with, such trademarks. Any third-party trademarks contained herein are the property of their respective owners, are used for information purposes and only to identify the company names or brands of their respective owners, and no affiliation, sponsorship or endorsement should be inferred from such use. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan Investment Partners. (080825-#W17) |
7 Sep 2026 - Manager Insights | Cyan Investment Management
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Chris Gosselin, CEO of FundMonitors.com, speaks with Dean Fergie, Director & Portfolio Manager at Cyan Investment Management. They discuss renewed momentum in Australian small caps, key themes emerging from reporting season, and where investors are finding attractive growth opportunities across the sector.
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31 Aug 2026 - Expert Analysis of Australia's July CPI Result
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Expert Analysis of Australia's July CPI Result FundMonitors.com August 2026 |
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Chris Gosselin, CEO of FundMonitors.com, speaks with Nicholas Chaplin, Director and Portfolio Manager at Seed Funds Management. They discuss the latest CPI result, persistent inflation pressures, and why Chaplin believes the RBA may need to take more decisive action on interest rates. The conversation also explores unemployment, government spending, and the challenges facing monetary policy. |
27 Aug 2026 - Manager Insights | Coller Capital
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Chris Gosselin, CEO of FundMonitors.com, speaks with David Hallifax, Head of Australia & NZ Private Wealth Distribution at Coller Capital. They discuss how private-market secondaries provide liquidity, diversification and access to established private equity and credit assets, as well as how Coller Capital's Australian strategy is structured for private wealth investors.
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24 Aug 2026 - Manager Insights | Sharpbridge Funds Management
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Chris Gosselin, CEO of Fundmonitors.com, speaks with Jarrad Stuart, MD & Portfolio Manager at Sharpbridge Funds Management. They discuss Sharpbridge's concentrated global equities strategy, its focus on individual stock selection, risk management, and the combination of quantitative screening and qualitative analysis used to select, size, and exit portfolio positions.
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11 Aug 2026 - Real Assets Review
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