NEWS
28 Jun 2022 - 4D podcast: explaining the country review process
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4D podcast: explaining the country review process 4D Infrastructure June 2022 Bennelong's Dave Whitby speaks with Greg Goodsell, 4D's Global Equity Strategist, about 4D's unique country review process - an integral part of the business's investment process - and its impact on the portfolio.
For more detail on our country review process, you can read our Global Matters article: Why country risk matters |
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Funds operated by this manager: 4D Global Infrastructure Fund, 4D Emerging Markets Infrastructure FundThe content contained in this article represents the opinions of the authors. The authors may hold either long or short positions in securities of various companies discussed in the article. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely as an avenue for the authors to express their personal views on investing and for the entertainment of the reader. |
28 Jun 2022 - EM Demographics - will ageing break a 40-year trend?
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EM Demographics - will ageing break a 40-year trend? abrdn June 2022 Populations in many emerging markets (EMs) are set to age rapidly, with countries facing challenges should they 'get old' before they 'get rich'. Whether economies age gracefully will reflect a complex combination of growth trajectories, the real interest rate environment and policy choices. Demographics affect not just the outlook for economic growth - with population size (and hence labour force) a key building block of the economy - but they also have implications for savers and borrowers (households, firms and governments) via an influence on interest rates. Indeed, while growth is a major influence on the EM investment landscape (stronger economic and corporate earnings growth lift equities), interest rates on debt determine the price of a range of other assets too. Lower rates raise the value of firms' revenue generation and vice versa. It is therefore important to form a view on how demographics will affect both growth and interest rates. Emerging market demographics 'in focus' - implications for equilibrium real interest rates is the second of three research papers that seek to examine the nature and consequences of demographic change in major emerging markets. This second paper hones in on the impact that demographic trends may have on real equilibrium interest rates - a crucial, but unobservable, economic variable. Government bond yields - falling since the 1980sTaking a step back from the current market volatility and concerns about high inflation, government bond yields in developed and emerging markets have been in long-term decline since the 1980s. Sliding developed market and EM yields over this period partly reflect success in bringing down inflation, but they also reflect falling real — inflation adjusted - yields. A large body of academic literature points to an underlying downward trend in equilibrium real interest rates (r*, pronounced 'r star') as the reason. Many papers have concluded that secular trends - including demographics - explain much of the fall in real yields, with the global financial system potentially creating a global phenomenon as markets link savings and investment across borders. This raises a crucial question for investors: if demographic trends are turning, will interest rates be pushed higher? R* as theoryThe equilibrium interest rate is a hard-to-measure theoretical concept. It's closely related to economic growth and is also the interest rate that balances an economy's supply of savings with the demand for investment. Some commentators have concluded that demographics will push up r* as shrinking pools of labour reduce the supply of savings. However, demographics operate via two channels which can work in opposite directions: fewer workers may reduce the number of savers, but they also push down on potential economic growth and therefore investment. R* gazingOur research suggests that over the next five years, demographic composition will typically push up on r* - primarily due to rising dependency ratios as the number of non-workers outpaces workers. But shrinking labour forces are almost always exerting greater downwards pressure. Moreover, other factors influencing potential growth are likely to push equilibrium interest rates in different directions across EMs. On a net basis, roughly half of major EMs may see equilibrium rates pushed down by these forces, while half may see them rise. Over a longer time horizon - say 30 years - the impact of shifting demographic composition potentially creates more meaningful upwards pressure. But even then the outlook varies. For example, China faces a well-known demographic challenge as the result of its now scrapped 'One Child' policy. But even here, falling long-term growth will likely offset the impact on the balance of savings and investments from an ageing society. Demographics aren't destiny for growth, interest ratesDemographics are just one (albeit very important) influence on interest rates over the longer term. The Covid-19-shock, income inequality and technological change are all important drivers too, along with policy choices. Demographics are just one (albeit very important) influence on interest rates over the longer term Indeed, the fracturing of EM-developed market real yields - which had moved in near lockstep until 2013 - implies that domestic policy choices may have become increasingly important. Ageing by itself won't drive interest rates higher, compounding the Covid-19 shock. While demographic trends are becoming more adverse as populations age, the impact on real equilibrium rates continues to be offset in many countries by downwards pressure from slower growth in working-age populations. Additionally, the balance of risks from economic scarring, inequality and technology gives further weight to our research which suggests that few economies will suffer major upwards pressure on r*. Author: Robert Gilhooly, Senior Emerging Markets Research Economist |
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Funds operated by this manager: Aberdeen Standard Actively Hedged International Equities Fund, Aberdeen Standard Asian Opportunities Fund, Aberdeen Standard Australian Small Companies Fund, Aberdeen Standard Emerging Opportunities Fund, Aberdeen Standard Ex-20 Australian Equities Fund (Class A), Aberdeen Standard Focused Sustainable Australian Equity Fund, Aberdeen Standard Fully Hedged International Equities Fund, Aberdeen Standard Global Absolute Return Strategies Fund, Aberdeen Standard Global Corporate Bond Fund, Aberdeen Standard International Equity Fund , Aberdeen Standard Life Absolute Return Global Bond Strategies Fund, Aberdeen Standard Multi Asset Real Return Fund, Aberdeen Standard Multi-Asset Income Fund |
27 Jun 2022 - Fund Review: Bennelong Long Short Equity Fund May 2022
BENNELONG LONG SHORT EQUITY FUND
Attached is our most recently updated Fund Review on the Bennelong Long Short Equity Fund.
- The Fund is a research driven, market and sector neutral, "pairs" trading strategy investing primarily in large-caps from the ASX/S&P100 Index, with over 20-years' track record and an annualised return of 12.84%.
- The consistent returns across the investment history highlight the Fund's ability to provide positive returns in volatile and negative markets and significantly outperform the broader market. The Fund's Sharpe Ratio and Sortino Ratio are 0.74 and 1.12 respectively.
For further details on the Fund, please do not hesitate to contact us.
AFM Fund Review - May 2022 (pdf format)
27 Jun 2022 - Performance Report: Glenmore Australian Equities Fund
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| Fund Overview | The main driver of identifying potential investments will be bottom up company analysis, however macro-economic conditions will be considered as part of the investment thesis for each stock. |
| Manager Comments | The Glenmore Australian Equities Fund has a track record of 5 years and has outperformed the ASX 200 Total Return Index since inception in June 2017, providing investors with an annualised return of 23.88% compared with the index's return of 8.84% over the same period. On a calendar year basis, the fund hasn't experienced any negative annual returns in the 5 years since its inception. Over the past 12 months, the fund's largest drawdown was -8.65% vs the index's -6.35%, and since inception in June 2017 the fund's largest drawdown was -36.91% vs the index's maximum drawdown over the same period of -26.75%. The fund's maximum drawdown began in October 2019 and lasted 1 year and 1 month, reaching its lowest point during March 2020. The fund had completely recovered its losses by November 2020. The Manager has delivered these returns with 7.21% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 two times over the past five years and which currently sits at 1.07 since inception. The fund has provided positive monthly returns 90% of the time in rising markets and 40% of the time during periods of market decline, contributing to an up-capture ratio since inception of 232% and a down-capture ratio of 98%. |
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27 Jun 2022 - Performance Report: Quay Global Real Estate Fund (Unhedged)
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| Fund Overview | The Fund will invest in a number of global listed real estate companies, groups or funds. The investment strategy is to make investments in real estate securities at a price that will deliver a real, after inflation, total return of 5% per annum (before costs and fees), inclusive of distributions over a longer-term period. The Investment Strategy is indifferent to the constraints of any index benchmarks and is relatively concentrated in its number of investments. The Fund is expected to own between 20 and 40 securities, and from time to time up to 20% of the portfolio maybe invested in cash. The Fund is $A un-hedged. |
| Manager Comments | The Quay Global Real Estate Fund (Unhedged) has a track record of 6 years and 5 months and has outperformed the BBAREIT Index since inception in January 2016, providing investors with an annualised return of 7.75% compared with the index's return of 6.52% over the same period. On a calendar year basis, the fund has only experienced a negative annual return once in the 6 years and 5 months since its inception. Over the past 12 months, the fund's largest drawdown was -12.51% vs the index's -11.14%, and since inception in January 2016 the fund's largest drawdown was -19.68% vs the index's maximum drawdown over the same period of -23.56%. The fund's maximum drawdown began in February 2020 and lasted 1 year and 4 months, reaching its lowest point during September 2020. The fund had completely recovered its losses by June 2021. The Manager has delivered these returns with 0.65% more volatility than the index, contributing to a Sharpe ratio which has fallen below 1 four times over the past five years and which currently sits at 0.6 since inception. The fund has provided positive monthly returns 71% of the time in rising markets and 36% of the time during periods of market decline, contributing to an up-capture ratio since inception of 63% and a down-capture ratio of 60%. |
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27 Jun 2022 - Managers Insights | Collins St Asset Management
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Damen Purcell, COO of Australian Fund Monitors, speaks with Rob Hay, Head of Distribution & Investor Relations at Collins St Asset Management. The Collins St Value Fund has a track record of 6 years and 4 months and has outperformed the ASX 200 Total Return Index since inception in February 2016, providing investors with an annualised return of 17.87% compared with the index's return of 10.3% over the same period.
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27 Jun 2022 - New Funds on Fundmonitors.com
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New Funds on FundMonitors.com |
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Below are some of the funds we've recently added to our database. Follow the links to view each fund's profile, where you'll have access to their offer documents, monthly reports, historical returns, performance analytics, rankings, research, platform availability, and news & insights. |
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DigitalX Bitcoin Fund |
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Balmoral Digital Assets Fund |
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27 Jun 2022 - 10k Words
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10k Words Equitable Investors June 2022 Price-to-Earnings multiples have been crunched in the calendar year to-date, as FactSet and strategist Christophe Barraud chart - but that begs the question posed by Sanford Bernstein - does this imply earnings expectations will be cut? Global equity capital markets volumes have dropped more than market indices, Equitable Investors highlights, while there are plenty of companies in need of fresh cash. Below-trend economic growth and above-trend inflation is the widely held consensus view of the economic backdrop from the Bank of America global fund manager survey. Off the back of that, the market is expecting the Fed cash rate to settle at ~3%, Wilsons calculates. Back in Australia, ANZ-Roy Morgan Consumer Confidence is strikingly low amid all the talk of inflation and interest rates - search terms that have surged on Google Trends. IFM highlights that Australian mining profits have for the first time exceeded profits in all other non-finance sectors combined.
S&P 500 Forward PE over 10 years Source: FactSet
S&P 500 trailing PE since 1955 Source: Bloomberg, @C_Barraud
Are earnings forecasts about to be downgraded?
Global Equity Capital Markets ($US)
No, ASX-listed cash burners with 12m or less cash at last reported burn-rate
Source: Equitable Investors
"Stagflation" is the most popular economic backdrop expectation
Source: BofA Global Fund Manager Survey (June 2022)
Expected path of Federal Reserve cash rate Source: Refinitiv, Wilsons
ANZ-Roy Morgan Consumer Confidence
Australian web searches for "inflation" (blue line) and "interest rates" (red line) Source: Google Trends, Equitable Investors
Australian Gross Operating Profits Source: ABS, IFM June Edition Funds operated by this manager: Equitable Investors Dragonfly Fund Disclaimer Nothing in this blog constitutes investment advice - or advice in any other field. Neither the information, commentary or any opinion contained in this blog constitutes a solicitation or offer by Equitable Investors Pty Ltd (Equitable Investors) or its affiliates to buy or sell any securities or other financial instruments. Nor shall any such security be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction. The content of this blog should not be relied upon in making investment decisions.Any decisions based on information contained on this blog are the sole responsibility of the visitor. In exchange for using this blog, the visitor agree to indemnify Equitable Investors and hold Equitable Investors, its officers, directors, employees, affiliates, agents, licensors and suppliers harmless against any and all claims, losses, liability, costs and expenses (including but not limited to legal fees) arising from your use of this blog, from your violation of these Terms or from any decisions that the visitor makes based on such information. This blog is for information purposes only and is not intended to be relied upon as a forecast, research or investment advice. The information on this blog does not constitute a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Although this material is based upon information that Equitable Investors considers reliable and endeavours to keep current, Equitable Investors does not assure that this material is accurate, current or complete, and it should not be relied upon as such. Any opinions expressed on this blog may change as subsequent conditions vary. Equitable Investors does not warrant, either expressly or implied, the accuracy or completeness of the information, text, graphics, links or other items contained on this blog and does not warrant that the functions contained in this blog will be uninterrupted or error-free, that defects will be corrected, or that the blog will be free of viruses or other harmful components.Equitable Investors expressly disclaims all liability for errors and omissions in the materials on this blog and for the use or interpretation by others of information contained on the blog |
Source: Sanford Bernstein
27 Jun 2022 - Consolidation and rising tail risks
24 Jun 2022 - Hedge Clippings |24 June 2022
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Hedge Clippings | Friday, 24 June 2022 Last week's Hedge Clippings noted that central bankers were caught between a rock and a hard place, trying to manage inflation by tightening monetary policy, and at the same time managing a balancing act trying to prevent their economies falling into a recession. This week Australia's media only seemed to have a single topic (leaving aside Lisa Wilkinson's Logies stupidity) - namely inflation and wages. (No doubt the pedants will correctly note that's two topics, but they sort of go hand in hand.) The trouble with trying to curb inflation is that it's like trying to put a smell back in the bottle - once it's out, it's out. (Only genies and little ships go back in the bottle.) There was a chance, ever so slight, that whilst inflation was "transient" or external, it might have been possible to argue it was temporary. However, once the central banks started to lift rates, it was out. The combination of higher mortgage repayments and inflation leads to wage pressure, with the inevitable risk of an interest rate/wage/price spiral, and so it goes on. And on. Meanwhile Putin put a spike in the spokes, energy markets went into a spin, lettuces got into the act, and the price side of the spiral was confirmed. The Prime Minister had no option but to follow through on his election promise to push for the minimum wage to rise by the then inflation rate, and the Fair Work Commission obliged by lifting it by 5.2% for 184,000 lowest paid workers, and by 4.6% for another 2.6 million workers on higher awards. RBA governor Dr. Philip Lowe said he expected inflation to peak at 7% by the end of the year, and then "moderate", and while he doesn't believe official interest rates will reach 4%, he does admit his forecasting record in that regard hasn't been spectacular, to say the least. As far as forecasting a recession, he did at least cover himself by saying while he "doesn't see one on the horizon ... you can't rule anything out." To make his job easier, Dr. Lowe wants wages growth to be kept at 3.5%, while the ACTU's Sally McManus, not surprisingly wants her members to push for wage rises in line with inflation, which based on the RBA's forecast, means 7%, and predictably saying company profits are the cause of inflation. US Federal Reserve Chair Jerome Powell was even blunter than Philip Lowe - or maybe more realistic depending on one's view, acknowledging that a recession in the US was certainly a possibility. At the same time he reiterated that two key factors driving inflation - namely, energy prices and supply chain constraints - were out of his control, and that if he had to raise rates by 1% to curb inflation at the next or future meetings, he would. Against this backdrop it is no wonder that markets have rotated from last year's risk on, to this year's risk off, with the basis for equity valuations and multiples finally switching from forecast revenue, (or even consumer or subscriber numbers) to earnings, and then to recurring earnings in particular. In the upcoming reporting season there will no doubt be further revisions to equity prices as investors' and analysts' focus switches to recurring profit, or ROE. As the P side of the P/E ratio falls, so value - and buyers - will no doubt return. News & Insights New Funds on FundMonitors.com Manager Insights | Collins St Asset Management Megatrends drive sustainable growth | Insync Fund Managers Record high inflation could trigger a fresh eurozone financial crisis | Magellan Asset Management |
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May 2022 Performance News Bennelong Concentrated Australian Equities Fund Paragon Australian Long Short Fund Digital Asset Fund (Digital Opportunities Class) Glenmore Australian Equities Fund Insync Global Quality Equity Fund |
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