NEWS
4 Jul 2025 - Hedge Clippings | 04 July 2025
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Hedge Clippings | 04 July 2025
News | Insights Expert analysis on what the RBA will do next Tuesday | FundMonitors.com 10k Words | June 2025 | Equitable Investors May 2025 Performance News |
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27 Jun 2025 - Hedge Clippings | 27 June 2025
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Hedge Clippings | 27 June 2025
Webinar How to get the most from Fundmonitors.com News | Insights Why invest in infrastructure | Magellan Asset Management The return you see, the risk you don't | Canopy Investors May 2025 Performance News Insync Global Capital Aware Fund TAMIM Fund: Global High Conviction Unit Class |
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20 Jun 2025 - Hedge Clippings | 20 June 2025
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Hedge Clippings | 20 June 2025
Webinar How to get the most from Fundmonitors.com News | Insights Market Commentary | Glenmore Asset Management Investment Perspectives: Thinking about bonds.....and the local school play | Quay Global Investors May 2025 Performance News Bennelong Concentrated Australian Equities Fund 4D Global Infrastructure Fund (Unhedged) Bennelong Twenty20 Australian Equities Fund |
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13 Jun 2025 - Hedge Clippings | 13 June 2025
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Hedge Clippings | 13 June 2025
In the meantime, it certainly feels more dangerous, and even the US is shying away from becoming actively involved in the air or on the ground at this stage. Hopefully, that lessens the chances of escalation. Meanwhile, the immediate effect on financial markets was an inevitable after-market fall in US stock futures, and an almost 10% spike in crude oil prices, and a smaller increase in gold, now not far off US$3,500 per ounce. Possibly of greater risk to US markets is the potential for the demonstrations against Trump's deportation orders and subsequent deployment of the National Guard and the Marines to escalate over the weekend, and spread to other states and cities. By all accounts, Trump is itching for a showdown at home, while avoiding one overseas. Whether either or both of the above crises is sufficient to scupper Albo's chances of a meeting with Trump to discuss either tariffs, or the US review of AUKUS on the sidelines of the G7 leaders' meeting in Canada remains to be seen. The Australian government's sanctioning of two right-wing members of Israel's cabinet against the wishes of the US won't have helped his chances of success. Meanwhile, looking at May's fund performance (which we accept is looking in the rear-view mirror) shows a positive month, particularly by the various equity peer groups. While the ASX200 Total Return was up 4.2% for the month, and the S&P500 up 6.29% (taking their 12 month returns to 13.36% and 13.52% respectively), this is not surprising, but there were 20 or more funds with double-digit returns for the month, and close to 60% of equity based funds out performed the ASX200, while 94% of all funds produced positive returns for the month, and 91% over the past 12 months. A selection can be found below. Webinar How to get the most from Fundmonitors.com News | Insights Market Update | Australian Secure Capital Fund Canopy Highlights - insights from our global research | Canopy Investors May 2025 Performance News Bennelong Australian Equities Fund |
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6 Jun 2025 - Hedge Clippings | 06 June 2025
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Hedge Clippings | 06 June 2025 The minutes of the RBA's May meeting, released this week, revealed the board's focus on the uncertainty surrounding Donald Trump's Liberation Day tariff policies. Like everyone else, it isn't easy to know what the impact will be when Trump himself can't seem to make up his mind what they'll eventually be. What is generally accepted is that the outcome won't be positive for most countries, including ironically, the USA, even though Trump and his White House media team won't have a bar of that view. At a well-publicised event at a steelworks this week, Donald was promising workers the world - or his simplified version of it. Elsewhere some people with a long track record of really understanding (and working) in the real world, including Jamie Dimon from JP Morgan, when warning of an impending crack in the bond market, were pointing to a different kind of outcome. Even Trump's biggest reciprocal fan, Elon Musk, has joined the chorus of criticism. Now no longer head of DOGE, Elon seems free to speak his mind, including claiming that Trump was named in the Epstein files to confirm his point. Having reportedly spent $300m helping the Human Headline make it to the White House for the second time, and watching a decline in the price of Tesla since his inauguration in January, we wonder if he still thinks it was a good investment? Now it turns out there's a full-scale war of words between the two on their respective social media platforms, it could get even uglier. Somehow it feels like Trump's presidency is turning into something we might watch on Netflix, which would be entertaining if it wasn't so serious. Enough of Elon and Donald's personal issues. What was also on the agenda this week was a phone call between Washington and Beijing, possibly indicating some kind of tariff truce might be possible, while there seems no such backing down by either, or any, party over Ukraine's future. One wonders how many crises - personal or global - Trump can manage at one time? News | Insights The big issues for investors coming out of Washington | Magellan Asset Management Sports Investment: The New Frontier of Alternative Assets | Altor Capital Instant Everything: The New Retail Revolution | Insync Fund Managers May 2025 Performance News Glenmore Australian Equities Fund Bennelong Emerging Companies Fund |
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30 May 2025 - Hedge Clippings | 30 May 2025
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Hedge Clippings | 30 May 2025
News | Insights Trip Insights: Asia | 4D Infrastructure 10k Words | Equitable Investors April 2025 Performance News TAMIM Fund: Global High Conviction Unit Class DAFM Digital Income Fund (Digital Income Class) Insync Global Quality Equity Fund |
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23 May 2025 - Hedge Clippings | 23 May 2025
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Hedge Clippings | 23 May 2025 This week's rate cut following the RBA's meeting on Tuesday was pretty much a fait accompli, and apart from one big bank economist who was backing a 50 bps move, it was widely expected. Had it not been for the election getting in the way, there's a good chance the RBA would have moved at their previous board meeting. We ran a webinar immediately after Tuesday's decision featuring a panel of three well-respected fund managers - Nick Chaplin from Seed Funds Management, Winston Sammut from Euree Asset Management, and Alex Pollak from Loftus Peak. While there were no surprises regarding the outcome, there were plenty of interesting insights from them on the outlook from here. If you missed it, you can watch a recording from the link in the news section below. For rate move enthusiasts, the focus now will be on how many more cuts there may be this side of Christmas. While the consensus is for two more, taking the cash rate down to 3.35% at least (assuming 0.25% each), it is worth remembering the consistent use of the word "uncertain" in the RBA's statement. Locally one big variable will be the strong labour market, with the ABS announcing wage and salary growth of 5.8% in the year to March. Of course there's always an element of uncertainty in economic forecasting, but throwing in the unpredictability of Donald Trump's policy zig-zags and U-turns makes it particularly difficult to see far ahead. Overseas, the FED's Jerome Powell is sticking to his guns given the uncertain effects of the US vs. China and the rest of the world's tariff policy. The Donald seems to have at last caught on that the uncertainty of both the magnitude and timing of the eventual outcome is harming the US economy as much as anyone else's. Trump loves to use the analogy of holding a strong hand in negotiations, but China (so far) seems to be holding their nerve. There are a number of opinions on Trump, but it's worth listening to what Anthony 'The Mooch' Scaramucci, head of SkyBridge Capital, and who served as White House Director of Communications for just 11 days in July 2017 during Trump's first term, has to say. Actually, if you Google the Mooch, you'll find he has plenty to say about everything, but particularly Trump. One wonders how he has time to run SkyBridge given the time he spends on, or in, the media. As far as Trump vs. China is concerned, his view is that Trump will have to capitulate, although if and when that occurs there's no doubt Trump won't admit to it, or frame it that way. For another view on China, it's worth reading, (here) or watching (here) Deputy Governor of the RBA Andrew Hauser's address to the Lowy Institute yesterday. Hauser is understandably less direct than Scaramucci, but having visited China just a week after Trump's (then) Liberation Day announcement, he was well placed to judge Chinese reaction first-hand. We suspect that beneath the RBA speak, Hauser may be at least on the same side, or hold a similar view as the Mooch. Changing tack, it seems at last there's some pushback against the Treasurer's plans for changes to super balances above $3 million. The issue is not really about higher taxes (30%) on large balances. Most taxpayers accept that concept on their everyday wages and salaries. It is probably not even about not indexing the $3 million level to adjust for inflation, because, as Chalmers points out, that can be left for future governments. The completely ludicrous, unfair, dangerous, and we would have thought unworkable aspect, is taxing unrealised capital gains. Sadly, post-election, jumping up and down now is a classic case of too little, too late, or closing the stable door after the horse has bolted. What were the Liberals thinking by not making the most of that argument when they had the chance, rather than now, when no one is really listening to them? Although looking back at the election result, it seems not many (or enough) voters were listening to them during the election campaign either. News | Insights | Webinar Webinar Recording | Impact of Tuesday's RBA rate decision Investment Perspectives: The clear themes emerging from the tariff chaos | Quay Global Investors Market Commentary | Glenmore Asset Management April 2025 Performance News 4D Global Infrastructure Fund (Unhedged) Canopy Global Small & Mid Cap Fund |
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16 May 2025 - Hedge Clippings | 16 May 2025
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Hedge Clippings | 16 May 2025 Consensus expectations from a significant majority of economists anticipate a 25 basis point cut next Tuesday when the RBA announces their decision following the new format 2-day board meeting. If the economists are correct - and the market is certainly backing that view - it will bring the cash rate to 3.85%. For example, the CBA is amongst the pack, forecasting a 25 basis point cut, with potential further cuts in August and November, aiming for a year-end rate of 3.35%. Some analysts, like NAB's chief economist Sally Auld, suggest a more aggressive approach, proposing a 50 basis point cut in May, followed by additional reductions throughout the year, and potentially lowering the rate to 2.85% by December. ANZ has reportedly walked back from their previous call that the RBA would "definitely cut", now seemingly having a bet each way by suggesting there's around a 30% chance they'll stay on hold for at least another month. As usual, there are arguments both for and against a move: Inflation at 2.4% (12 months to March) is firmly in the RBA's 2-3% target range, although that number remains skewed by government subsidies on electricity prices, which fell 9.6%. The RBA's preferred trimmed mean measure is a tad higher at 2.7%, but still within the band. More recent CPI figures for April aren't due until the week after the RBA meets, but it would be surprising if it kicked up above 3% to spoil Albo and Jim Chalmers' post election party. Against that, Australia's labour market remains tight, with a notable increase of 89,000 jobs in April and a steady unemployment rate of 4.1%. Such strength could lead to wage pressures, potentially reigniting inflation, and Michele Bullock has previously pointed to this as a risk, preferring to see a number above 4.5%. The RBA has previously cited "uncertainty" as a significant reason for their reluctance to ease further, or earlier, and while the local political outlook now seems stable, uncertainty definitely persists despite an apparent easing of the tariff tit-for-tat between the US and China in particular. However, it is only an easing from the trade-stopping proposed levels of 145% and 125%, down to a US tariff of 30%, and a reciprocal tariff of 10% from China. That level of uncertainty may, or may not, impact the RBA's decision-making process, but it remains a major concern for the US itself, where the FED's Jerome Powell is standing firm against both Trump's threats and insults, and a decision on cutting rates from their current 4.25% to 4.50% level. The market had expected a cut at the FED's June meeting, but this has now been pushed out to July or possibly September. Looking further out, the market is still not convinced US rates will be much below 4% by December, and if Trump's tariffs lead to inflation kicking up (and it seems difficult to imagine why it would not, even at the new lower tariff levels) then maybe Powell's stance will be vindicated. That leads to another dilemma (or effect) on Australia and the RBA. If NAB's forecast of Australian rates of 2.85% by December is correct, and a worst-case scenario of 4% or more in the US, what does that do to the Aussie dollar? Meanwhile, while the chances of a recession might seem slim in Australia, the US economy is heading into uncharted Trump-induced waters. Slowing economic activity and consumer confidence in the US may force Powell to cut, leading to two significantly different policy decisions. In the meantime, next Tuesday afternoon's RBA announcement, due at 2:30 looms large. At 3:30 Michele Bullock will hold her traditional media conference. Hedge Clippings and Australian Fund Monitors have organised a webinar at 4:30 immediately after the Governor finishes her address to discuss the outcome of the meeting and, more importantly, the outlook for both Australia's markets, and the Global economy. We have assembled three expert fund managers to discuss, debate and share their views. Please register below to join the Zoom webinar, which should last between 30 to 45 minutes and will include a Q&A. Our guest panel of fund managers will be:
Each of our expert panel members will bring a different perspective, and we look forward to hearing from them. Registration is required - please click here or below.
News | Insights | Webinar Webinar | Impact of Tuesday's RBA rate decision The Resurgence of Nuclear Energy | 4D Infrastructure The Future of Travel: How AI-powered travel agents are revolutionising the industry | Magellan Asset Management April 2025 Performance News Skerryvore Global Emerging Markets All-Cap Equity Fund Bennelong Concentrated Australian Equities Fund Argonaut Natural Resources Fund |
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9 May 2025 - Hedge Clippings | 09 May 2025
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Hedge Clippings | 09 May 2025 Although last week's Hedge Clippings described the election campaign as boring, disappointing and uninspiring, the outcomes and after-effects have been anything but. Anthony Albanese's victory was decisive and well deserved, even if he was ably assisted by Peter Dutton and Adam Bandt, who each contributed to Albo's success, and their own eventual demise. To what extent Dutton was supported (probably the wrong term) by the Liberal party hierarchy, or the executive and his inner circle, we'll no doubt have to wait to find out when the inevitable post-mortem is held or books are written. Treasurer Jim Chalmers summed it up on election night when he said he "couldn't believe his luck" when his opposite number announced they would vote against his across-the-board tax cuts, even though in actual dollar terms it amounts to $268 in 2026-27, and $536 in 2027-28. That's enough for one cup of coffee a week next year, and two cups the year after. We can't wait! Where the Libs go from here is anyone's guess, but if they continue to listen to the right wing of the party (or Gina Rinehart, who'd like them to be more like Trump), they're going to remain where they are, or worse, for the foreseeable future. Which, sadly, is not good for democracy. As it is, we have to hope that success will not go to Albo's and the loony left's head, and that ideas such as taxing unrealised capital gains won't spread beyond super balances above $3 million. Our guess, however, is that they will. Bottom line, congratulations to Albanese. He's only 62, so short of another Hawke/Keating type deal, Jim Chalmers will have to wait at least three years, and possibly six. So back to the real world, where they probably couldn't give a fig to Australian's antics of the past few weeks. As pointed out by PinPoint Economics' latest report (and chart pack), tariffs and trade wars are the focus of economic and political debate at present. To quote PinPoint's Executive Summary, the parameters shift on an almost daily basis, such that there's a need to cut through to the underlying fundamentals and work out what to watch.
However, the most pertinent aspect is PinPoint's view that the parameters shift on an almost daily basis. Trump's style is to come out all guns blazing in an attempt to get the upper hand - or to achieve maximum exposure, or both. What the final outcome will be once he's chopped and changed his terms on a country-by-country basis remains to be seen. First cab off the rank is the UK - (The Donald's obviously keen to make sure his invitation to Buckingham Palace is still secure), where he's kept a 10% tariff in place in spite of the US enjoying a trade surplus (like Australia) with the UK. He's also hinted that the 145% tariffs on China will be watered down, and that the White House is in talks with dozens of other countries. Trump has been less successful buying Canada and Greenland (so far), nor has he stopped the war in Ukraine or Palestine. Everything remains uncertain, making Australia a relative oasis of calm! News & Insights 10k Words | Equitable Investors Market Commentary | Glenmore Asset Management April 2025 Performance News Seed Funds Management Hybrid Income Fund Bennelong Australian Equities Fund Bennelong Long Short Equity Fund |
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2 May 2025 - Hedge Clippings | 02 May 2025
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Hedge Clippings | 02 May 2025 The choice of descriptions of the 2025 election campaign are numerous, but we would suggest all are synonyms of one of the following: boring, disappointing, uninspiring. In other words lacking any real vision for the future - other than that of the individuals contesting the various seats. Primary amongst the culprits are Albanese and Dutton. Albo at best has been uninspiring during his three years in the top office, and until the start of the year when he seemed to develop some enthusiasm for the task ahead, looked like he was gone for all money. Then along came Peter Dutton, who having had nearly three years to prepare for the election, has done nearly everything he could to make Albo re-electable - or rather the least worst option in a two-horse race. Maybe he was relying on Albo to trip up (which he almost did when falling off the stage), or merely bore the electorate into ensuring he became a one term PM. The only thing to be said for Albo is he went full term - unlike his predecessors Kevin Rudd, Julia Gillard and then Kevin again. For example: For some reason Dutton (or the faceless men and women of the Liberal party hierarchy) thought that going from being a zero operator of nuclear power stations - following a dirty backroom deal in the Senate engineered by the Greens in 1998 - to having seven major nuclear stations in one swoop, would be an easy sell. It might have been to the party faithful, but where was the background media and PR campaign promoting small-scale modular reactors (SSMR's)? In its place, the government was able to mount (yet another) scare campaign, in spite of 32 countries around the world operating no less than 440 nuclear reactors, with France relying on nuclear for 70% of its power generation, and Australia signing up for nuclear powered submarines. Given Dutton's timeframe for Australia to "go nuclear" is 10 to 15 years (assuming no delays), surely a smarter move would be to hasten slowly, while getting the majority of the electorate onside, and exploring the latest technology provided by SSMR's? Meanwhile, Australia accounts for around 30% of the world's supply of uranium, which is currently selling for just over US$50 per pound. But we don't/won't use it. Go figure? Dutton has allowed himself to play catch-up with an irresponsible spendathon, and has ended up matching dollar for dollar the Labour Party's lavish vote-grabbing hand-outs, while opposing tax cuts for all. As we've noted before, voters are driven by their back pockets. Albanese and Chalmers have cynically targeted nearly every self-interested demographic group in the country, with the economic equivalent of fairy bread at a four-year-old's birthday party - looks attractive, the punters will lap it up, but it won't do them any good after the initial sugar hit. Both parties have committed to increased budget deficits, and no-one is talking about structural changes to the budget or the taxation system. Except the Labour party, who want to introduce a tax on unrealised capital gains... but haven't really been called out on it. Go figure again! Meanwhile Dutton hasn't been helped by a typical scare campaign, but he's left himself open to that. So the polls - and the media - are writing the opposition off. Maybe there's an outside chance of an upset given the peculiarities of Australia's voting system and state-based biases, but we doubt it. The good news is that the election will be over next week. The bad news is that whoever wins will be there for another three years! Back to interest rates: Inflation is now in the RBA's mid range target at 2.4%, (for the second quarter in a row) or 2.9% if you take their preferred trimmed mean measure. Capital city weighted mean was a tad higher at 3.0%, with Brisbane spoiling the party thanks to the end of $1,000 electricity handouts. On receipt of the numbers, Jim Chalmers was as keen as usual not to be pressuring the RBA, whilst doing precisely that, but it is going to be difficult for the RBA to keep rates on hold at 4.1% following their next meeting on the 20th of May. News & Insights Manager Insights | East Coast Capital Management The Future of Transport: Innovations transforming how we move | Magellan Asset Management First Do No Harm | Airlie Funds Management March 2025 Performance News TAMIM Fund: Global High Conviction Unit Class Insync Global Capital Aware Fund DAFM Digital Income Fund (Digital Income Class) |
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