NEWS
26 Jun 2026 - Hedge Clippings |26 June 2026
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Hedge Clippings | 26 June 2026 Central banks are trying to sound calm. Markets are trying to sound confident. Neither looks entirely convincing. RBA | Waiting is not relief The Reserve Bank left the cash rate unchanged at 4.35%, but nobody should have confused that with comfort. After a year of policy reversals, first down, and then back up, the Board is now in the only other position available: waiting. That is not the same as relief. More a case of being stuck between a rock and a hard place. The latest inflation data gave both sides of the argument (and politics) something to cling to. Annualised headline CPI fell to 4.0% in May, helped by fuel-price effects, which was quickly treated in some corners as evidence that pressure is easing. The more important number, however, was the trimmed mean, which rose to 3.6% and reached its highest level since September 2024. That is the measure the RBA watches most closely, and as the chart above shows, it is not moving in the right direction. The difficulty the RBA has at this point in the cycle - apart from inflation remaining above their 2-3% trimmed mean target - is that they can see more volatility to pricing ahead. In July the fuel excise respite is due to halve, and at some stage will be removed altogether. While hostilities in the Middle East have abated (for now) it is going to take some time for the aftermath of the war, and its effects on supply driven inflation, to work through the system. The only certainty seems to be uncertainty. The labour market adds to the ambiguity. May employment rose by 40,300, which looks solid at first glance. But 35,200 of those jobs were part-time, while total hours worked fell. Unemployment eased to 4.4% from April's 4.5%, but this is not a labour market roaring back to life. It is a labour market holding headcount while reducing hours. That matters. It gives the RBA no clean reason to cut, and no urgent reason to hike. Instead, it keeps the Board exactly where it has been: staring at the next inflation print and hoping the economy does not force its hand. However, according to Renny Ellis from Arculus Funds Management, the market is only pricing in around 8 bps of tightening over the next 12 months, which he believes is under-pricing the medium-term risk of a "higher for longer" environment, which in his view is leading to a further rate rise in Q4 this year. Ellis also sees the risk of "a credible path to a second 25bp increase in 2027" as being possible. You can read his Market Commentary via this link. Property | The policy squeeze arrives before the policy changes The housing market is already showing strain. The combined capitals' preliminary auction clearance rate fell to 47.4%, the lowest weekly reading since April 2020. That is not a market looking through rate hikes. It is a market absorbing them. Sydney and Melbourne remain the key pressure points. Affordability is stretched, borrowing capacity has been hit, and consumer confidence has not been helped by the Budget's changes to negative gearing and capital gains tax. National home values were flat in May, while Sydney values are already below their November 2025 peak. The important point is that the tax changes have not yet landed. The CGT discount reform and negative gearing restrictions are not due to apply until July 2027, while the SMSF residential LRBA ban is expected around August 2026. The current weakness is therefore a combination of rate-driven, combined with investors reacting to uncertainty and fear of the tax reforms that will bite later. If consumer confidence deteriorates further, the property market could shift from a source of household wealth comfort to a source of household anxiety very quickly. Chalmers can argue about the technicalities of the property market being in a correction or not, but the reality for homeowners with a high LVR, or selling their house into a softening market are feeling the reality pinch. The bottom line This was a week of misleading headlines and uncomfortable details. Headline inflation fell, but underlying inflation rose. Jobs grew, but mostly part-time. GDP expanded, but only because data-centre investment did the heavy lifting. Property softened before the major tax reforms have even begun to bite. For investors, the lesson is familiar. Volatility does not just reveal market direction. It reveals process. It shows which managers are relying on beta, which are managing risk, and which have a framework strong enough to survive when the story changes. That is where FundMonitors matters. Weeks like this are exactly why manager research, peer comparison and performance analysis are worth doing properly. News | Insights Is the Consensus on Equities the Riskiest Trade in the Room? | East Coast Capital Management Market Commentary | Glenmore Asset Management May 2026 Performance News Seed Funds Management Financial Income Fund DAFM Digital Income Fund (Digital Income Class) |
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26 Jun 2026 - Performance Report: ASCF High Yield Fund
[Current Manager Report if available]
26 Jun 2026 - Yields take centre stage again
25 Jun 2026 - Performance Report: Glenmore Australian Equities Fund
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25 Jun 2026 - Japan - From Observation to Conviction and Two Quality Investment Ideas
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Japan - From Observation to Conviction and Two Quality Investment Ideas Alphinity Investment Management May 2026 4-minute read |
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Japan is changing -- and the pace of that change is easy to underestimate from a desk in Sydney. Global Portfolio Manager Chris Willcocks recently completed a week-long investor trip through Osaka, Tokyo, Kyoto and Nagoya, meeting management teams across Industrial, Consumer, Property and Technology companies. The on-the-ground experience reinforced and deepened a thesis already forming in our portfolios. Below we share the highlights from those observations -- and two quality Japanese companies which are in an earnings upgrade cycle. Three forces reshaping JapanJapan's transformation rests on three structural pillars that are now compounding positively for the first time in decades. Each alone would be noteworthy; together, they represent the most significant fundamental improvement recent memory.
Inflation Has Finally Arrived & Wages are Keeping Pace
Source: Bloomberg, April 2026
Taken together these macro forces are driving up asset prices and boosting consumer confidence. You see evidence of this across the cities and financial markets. House prices in parts of Tokyo have appreciated ~40% in six months, the Nikkei has surpassed its 1989 all-time high, inbound tourism is at record levels. There were more Ferraris and Lamborghinis on the streets of Tokyo than we have seen in any city recently. Mirroring global trends, the lower-end consumer is less buoyant, and construction faces increasing cost headwinds, but the broader picture is one of a country regaining its economic confidence. The Japanese stock market in context
Source: Bloomberg, April 2026 Against this macro backdrop, the question for active investors is not whether Japan is changing -- it is which companies are best placed to capture that change. Two high quality Japanese companiesAlphinity invests in Earnings Leaders -- quality businesses, trading at reasonable valuations, that are entering or sustaining an earnings upgrade cycle. Japan, at this point in its structural reset, is generating exactly that kind of opportunity. The two companies we discuss below are held across our global funds.
Fast Retailing -- the Japanese apparel giant behind the UNIQLO brand -- has quietly evolved from a domestic discount retailer into one of the world's most compelling consumer growth stories. Founded in 1949 and listed in Tokyo since 1999, the company today generates ¥3.4 trillion in annual revenue across over 2,500 stores in more than 25 countries, with a long-term revenue target of ¥10 trillion. At the helm is founder Tadashi Yanai, who retains a ~40% stake and remains as deeply invested in the business as ever -- in every sense.
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Funds operated by this manager: Alphinity Australian Share Fund , Alphinity Concentrated Australian Share Fund , Alphinity Sustainable Share Fund , Alphinity Global Equity Fund , Alphinity Global Sustainable Equity Fund This material has been prepared by Alphinity Investment Management ABN 12 140 833 709 AFSL 356 895 (Alphinity). It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. Any projections are based on assumptions which we believe are reasonable but are subject to change and should not be relied upon. Past performance is not a reliable indicator of future performance. Neither any particular rate of return nor capital invested are guaranteed. |
24 Jun 2026 - Performance Report: DAFM Digital Income Fund (Digital Income Class)
[Current Manager Report if available]
24 Jun 2026 - Don't be dumb
23 Jun 2026 - Performance Report: Altor AltFi Income Fund
[Current Manager Report if available]
markets higher, despite the ongoing conflict in Iran. (2-minute read)
23 Jun 2026 - Glenmore Asset Management - Market Commentary
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Market Commentary - May Glenmore Asset Management June 2026 (2-minute read) Artificial intelligence ('AI') enthusiasm continued to push US markets higher, despite the ongoing conflict in Iran. Strong results from companies such as Dell and Advanced Micro Devices boosted the tech sector, resulting in a +8.4% increase in the NASDAQ. Despite not experiencing the same sharp rise, the S&P 500 rose +5.2%. Similar to the prior month, US markets outpaced their international peers, with the Euro Stoxx 50 and FTSE 100 rising +2.9% and +0.3% during the month, respectively. Domestic markets continued to grind higher, with the ASX All Ordinaries Accumulation Index rising +1.2%. Miners led the way (+10.4%), whilst the Consumer Discretionary sector also outperformed (+6.3%), as investors reduced the chance of further RBA rate hikes following the release of softer economic data. From a negative standpoint, CSL's fall from grace continued (-22%) after another earnings downgrade. In bond markets, the US 10-year bond yield rose +7 basis points (bp) to 4.44%, whilst its Australian counterpart fell - 23bp to 4.8%. The Australian dollar fell marginally during the month to US$0.72, implying a decrease of 0.1 cents. Funds operated by this manager: |
22 Jun 2026 - Is the Consensus on Equities the Riskiest Trade in the Room?
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Is the Consensus on Equities the Riskiest Trade in the Room? East Coast Capital Management June 2026 (7-minute read) A new data product launched recently by CNBC and wealth technology platform Addepar offers something genuinely useful: a quarterly window into how family offices (some of the most sophisticated pools of private capital in the world) are actually allocating their money. The inaugural reading is instructive, and not entirely for the reasons its authors intended. According to the tracker, equities now account for 34% of family office portfolios, up from 32% a year ago. This makes equities the largest and fastest-growing asset class in the cohort. Public stocks, the report notes, were one of the only categories to grow as a share of portfolios over the past year. Eighty per cent of those equity holdings sit in domestic US stocks. That is a lot of conviction in a single asset class. And when an asset class commands that kind of weight in the portfolios of the most well-resourced investors in the world, it is worth pausing to ask a simple question: what does the price of that asset actually reflect? What the Numbers SayThe Shiller CAPE ratio is the cyclically adjusted price-to-earnings ratio that smooths earnings across a full business cycle to filter out short-term distortions.
To put 40.7 in context: this is only the second time in the 155-year recorded history of the metric that US equities have traded above the 40 threshold. The first was the peak of the dot-com bubble in late 1999 and early 2000. History does not repeat, but the company the current reading keeps is worth noting. The Buffett Indicator is the total US stock market capitalisation expressed as a percentage of GDP, which Warren Buffett himself described as "probably the best single measure of where valuations stand at any given moment".
Based on current levels, some models project the US equity market to deliver negative real returns over the next eight years. These are not fringe indicators. They are among the most widely respected tools in long-run valuation analysis. And right now, they are aligned in pointing in the same direction. The "This Time is Different" Argument Deserves a HearingThe most intelligent counter-argument to any valuation-based concern is the structural one: that the composition of the market has changed so fundamentally that historical averages are no longer the right benchmark. It goes something like this. The S&P 500 today is dominated by a handful of companies including Microsoft, Nvidia, Apple, Alphabet and Meta that are not merely large but potentially transformative. Artificial intelligence, the argument runs, represents a genuine productivity step-change: the kind that compresses costs, expands margins, and accelerates earnings growth across the economy in ways that prior cycles simply did not. If AI delivers on even a fraction of its projected economic impact, the earnings denominator in every valuation ratio is going to look very different in five years. On that view, a CAPE of 40 may not be irrational but simply forward-looking in a way that backward-averaging cannot capture. This argument is not frivolous. There are serious economists and investors who make it carefully, and it deserves to be engaged rather than dismissed. But there are three problems with anchoring a 34% equity allocation to it:
The honest position is this: AI may well be structurally significant enough to justify higher-than-historical valuations.
The Problem with ConsensusThere is an important distinction between a decision that looks correct and a decision that is correct. When the world's most sophisticated investors are adding to equities at exactly the moment those equities are trading at historically extreme valuations, the two things can diverge significantly. This is not a criticism of family offices. The past several years have rewarded equity concentration generously, and the behavioural pull of recent performance is well-documented. Professor Ulrike Malmendier's research on what she calls the "experience effect" demonstrates that investors systematically overweight the market conditions they have personally lived through. A decade of strong equity returns leaves a mark. It shapes expectations, calibrates assumptions, and makes elevated allocations to equities feel entirely reasonable. Until it doesn't. The CNBC/Addepar data shows equities growing as a share of family office portfolios at the same time that every major long-run valuation metric is flashing caution. That is not a coincidence. It is precisely what the experience effect predicts. What Diversification is Actually Supposed to DoThe case for trend following as a complement to equity-heavy portfolios is rarely more relevant than it is in a high-valuation environment. Trend following does not require a view on whether equities will correct, or when. What it does is participate in sustained price moves - in any direction, across any asset class - without requiring the market to go up. In environments where equities are priced for near-perfection and deliver something less than that, trend following has historically provided what researchers call crisis alpha: genuine uncorrelated returns precisely when conventional portfolios need them most. There is a further point worth making, and it is one that often surprises people. Trend following does not require equities to fall in order to perform. If the AI thesis is correct and US equities continue their ascent, a trend-following strategy will participate in that move. It is, by design, long whatever is going up. The irony is that trend following can trade a bubble just as effectively as it can trade a correction. It does not need to predict which one is coming. What it needs is for prices to move in a sustained direction (and markets at extreme valuations tend to be nothing if not directional) on the way up and, eventually, on the way down. The exit from a trend is governed by the same rules as the entry: no heroics, no forecasting, no requirement to be right about the macro. The ECCM Systematic Trend Fund trades across more than 90 global futures markets - commodities, fixed income, currencies, equity indices - allowing it to capture trends wherever they emerge. In Q1 2026, that meant energy markets, where sustained directional moves provided meaningful returns while equity-heavy portfolios struggled. The point is not that this will always happen. The point is that the opportunity set is genuinely broader than a portfolio concentrated in US public equities. The efficient frontier - the concept that the best risk-adjusted portfolio is not necessarily the highest-returning one, but the one that combines assets most efficiently - is often invoked in theory and ignored in practice. The Addepar data suggests that family offices, for all their sophistication, are no exception. A Note on ExpectationsNone of this is a prediction. Elevated valuations can persist for longer than any rational model suggests they should. The CAPE ratio was above 30 for years before the dot-com correction. Markets can stay expensive. But there is a difference between accepting that markets can remain expensive and deciding that 34% of a portfolio in expensive equities (and concentrated 80% in a single country) is the appropriate response to the current opportunity set. At current valuations, US equities are being asked to do a lot of heavy lifting in portfolios that may have limited room to absorb disappointment. The question sophisticated investors should be asking is not whether equities belong in a portfolio. They do. The question is what work those equities are being expected to do, and what happens to the portfolio if that work doesn't get done. Genuine diversification - across return types, not just asset labels - exists precisely for that scenario. Wholesale clients can find more information on ECCM and the ECCM Systematic Trend Fund at Australian Fund Monitors and ECCM's website. Funds operated by this manager: |
