April was a slower month for Australian property values, posting a national rise of 0.3%, the lowest monthly growth rate since January 2025. 

Once again, Perth (+2.1%) led the way with a fourth consecutive monthly rise of greater than 2%, with its annual increase now reaching 26%. Likewise, Brisbane (+1.2%) and Adelaide (+1.1%) continued to add value, again posting monthly increases of greater than 1%. 

However, values in Melbourne and Sydney (both -0.6%) declined for a third straight month.

Additionally, estimates of capital city home sales over the past three months were down 5.4% compared to last year and 7.4% below the previous five-year average, indicating a slowdown in buyer demand. Regional areas have been more resilient in the face of this, with values increasing by 4.2% over the first four months of the year, compared to 1.8% for the capital cities. 

April Edition

Government bond yields around the world have reached decade highs, driven by higher energy costs and potentially ongoing inflationary pressures stemming from the U.S.-Iran conflict and disruption to global oil supply routes.

Beyond the immediate conflict, there are structural reasons yields may stay elevated. Government balance sheets across many advanced economies are increasingly stretched, with debt-fuelled expenditure supporting ambitious policy reforms - from defence to energy transition.

Beyond determining government borrowing costs, yields play a central role within the financial system. As the risk-free rate of interest, they underpin the cost of capital across the economy, meaning the current move higher in yields has implications well beyond bonds, reshaping valuations across equities, credit and real assets. If government bond yields stay higher for longer across most of the world, the cost of capital will also rise inexorably.

Higher yields translate directly into higher discount rates, and that matters for every asset in a portfolio. Whether its equities, credit or property, valuations are derived by discounting future cash flows at the risk-free rate plus a premium for investment risk. When that base rate moves higher, asset prices adjust lower.

A higher cost of capital will likely prompt investors to revise their hurdle rates higher for all investment opportunities and may suggest a more cautious approach to investment risk in general.

This could reveal vulnerabilities across asset classes which have benefited from a secular decline in interest rates, and therefore the cost of capital, over the past several decades.

Infrastructure, private credit and private equity have benefited from the valuation effects of a relatively low cost of capital, but this is now set to change as higher hurdle rates and revaluations unveil which asset classes and investment strategies can continue to sustain and deliver compelling risk-adjusted returns, and which will struggle to do so going forward.

"When the risk-free rate rises, every asset is repriced."

Higher bond yields increase discount rates across equities, credit and property--resetting valuations and raising hurdle rates for all investments.

Turning to domestic developments, this month's Commonwealth Budget brought significant tax reform and policy announcements alongside a compositional change in revenue and expenditure forecasts that led to modest improvements in the budget balance over the next decade.

Drilling into the tax policy changes, reforms to capital gains tax (CGT) and negative gearing may make property as an asset class less attractive to investors and dampen investment activity in the property market.

Some analysts forecast a consequent moderation in house prices across the country and frame the contractionary economic effects of the tax reforms as akin to that of one or two RBA rate hikes, foreshadowing the conclusion of an already well progressed RBA rate hike cycle.

As investors reassess their portfolios for tax efficiency under the new CGT regime, fixed income and other income generating assets such as high dividend domestic equities could be well placed to benefit from this shift in focus.

Ultimately, the budget forecasts depict Australia's fiscal conditions in a highly favourable light relative to our peers, and re-affirms that Australia's government debt remains very low by global standards.

For investors, this environment calls for a fundamental reassessment of portfolio construction - where return is coming from, what risks are being compensated, and whether allocations built in a low-rate world remain fit for purpose in a higher-rate one.

Our two thematic future exchange-traded funds (ETFs) - raw materials and supply chains - have just turned one. To mark the anniversary, we sat down with Blair Couper and Jamie Mills O'Brien, investment directors of our Future Supply Chains ETF. They reflected on what they've learned over the past year, how the strategy has evolved, and why they believe the case for resilient supply chains looks stronger than ever.

Q1. The Future Supply Chains ETF launched just over a year ago. Take us back to that moment - what was the original thinking behind launching the strategy?

Blair Couper:

A lot of it came down to what we were seeing in the real world. We think the next 10 years are likely to be characterised by lower growth and stickier inflation than the last decade, driven by the inexorable forces of demographics, debt and deglobalisation. Against this backdrop, we wanted to position our investors behind growth trends that can thrive even in a weaker macro environment. The changing nature of supply chains - and the structural forces underpinning them - was one such area.

Supply chains have gone from being something investors barely thought about to something that suddenly mattered every day - whether it was because of shortages, delays, or geopolitical tension. We felt that wasn't a short�'term disruption, but the start of a much bigger, longer�'lasting shift. The fund was really about giving investors a way to access that change in a considered, long�'term way, rather than reacting to the latest headline.

Q2. "Supply chains" can mean a lot of different things. How do you define future supply chains when you're thinking about it as an investment opportunity?

Jamie Mills O'Brien:

That's exactly the opportunity - one that touches so many parts of global markets. For us, future supply chains aren't just about moving goods from A to B. They're about how countries, companies and industries are rethinking where things are made, how secure they are, and how sustainable they need to be. In that sense, it represents a broad reshaping of the global economy, spanning technology, energy, manufacturing, and infrastructure.

A good example is defence and reindustrialisation (two themes we favour). After more than 20 years of underinvestment in its capital stock, the US is leaning far more heavily on its treaty allies in the Indo-Pacific, particularly Korea and Japan, to help bridge the gap with China across defence and automation. The unifying idea here is adaptation: states and companies responding to a world that's becoming more fragmented and certainly more challenging.

Q3. Why did you decide an ETF - and an actively managed one at that - was the right structure for this idea?

Jamie Mills O'Brien:

An ETF gives investors transparency, flexibility and ease of access, which we think really suits a thematic allocation. But we were equally clear that this couldn't just be rules�'based or static. Supply chains are evolving all the time, so active management allows us to adjust exposures, lean into areas we believe are gaining momentum, and step back when conditions change. It's about keeping the strategy relevant - and an active approach allows us to do that.

Q4. The strategy is built around three key drivers: national security, resilient supply chains, and decarbonisation. How did those pillars emerge?

Blair Couper:

They really came out of looking at what's driving decision�'making at government and corporate level. National security has become central to economic policy. Resilience is about reducing vulnerability and disruption. And decarbonisation is reshaping how energy and infrastructure are built. These forces overlap and reinforce one another. We saw them less as separate themes and more as different angles on the same structural shift.

Q5. Automation, reshoring and localisation are big themes globally. How do you avoid simply chasing the loudest trends or headlines?

Jamie Mills O'Brien:

It comes back to discipline. At the heart of our thematic process is a focus on identifying those themes - and, within them, those companies - that can create value from the most powerful structural growth trends shaping the global economy. As a result, we spend a lot of time focusing on business quality and long�'term fundamentals. At the same time, we are wary of areas where narrative and hype are driving enthusiasm, rather than company fundamentals.

A company benefiting from reshoring or rising defence spending still needs a robust balance sheet, strong competitive positioning and a business model that supports attractive economics. Being aligned with the theme gets a company onto the radar - but it doesn't automatically earn it a place in the portfolio.

Q6. One year on, what have you learned since launch? Have any aspects of the strategy evolved as markets - and geopolitics - have shifted?

Blair Couper:

If anything, the past year has reinforced our original thinking. The scale of policy intervention, defence spending and industrial support has been striking. At the same time, we've learned the importance of flexibility - some developments move faster than expected, others take time. The framework hasn't changed, but our understanding of how and when value emerges has definitely deepened.

Q7. Supply chains feel even more prominent in today's headlines than they did a year ago. Why do you think they've become more relevant, not less?

Blair Couper:

Recent events have shown that the underlying pressures haven't gone away - they've intensified. Geopolitical uncertainty, energy security concerns and trade tensions are now structural features of the global economy. We're seeing the last 50 years of globalisation give way to a world shaped by competing spheres of influence, fragmenting across China, the US and Europe. Governments are actively encouraging domestic production and demand, and companies are responding. In this world supply chains remain front and centre - not just as an operational issue, but as a strategic one.

Q8. For investors thinking about portfolio construction, how does a supply�'chain strategy sit alongside traditional global equity exposure?

Jamie Mills O'Brien:

We see it as a complement rather than a replacement. Traditional indices reflect where the world has been; thematic strategies are about where it's going. Supply chains touch many sectors and regions, but they're driven by different forces than broad market cycles. That can make them a useful diversifier for investors who are looking to build resilience into their portfolios.

Q9. What type of companies tend to stand out when supply chains are being redesigned rather than simply maintained?

Jamie Mills O'Brien:

Often, it's companies enabling change rather than resisting it. That might be firms providing automation, infrastructure, energy solutions or specialist components. What they tend to share is an ability to adapt - they're helping others become more efficient, more secure or more sustainable, rather than clinging to older models.

Q10. Finally, if you had to sum up what the Future Supply Chains ETF is really about, how would you describe it?

Blair Couper:

At its heart, it's about investing in how the global economy is being rebuilt. Supply chains are no longer just about cost efficiency - they're about security, resilience and long�'term sustainability. This strategy is designed to capture that transformation as it unfolds.

Fund-specific risks

The fund invests in equity and equity related securities. These are sensitive to variations in the stock markets which can be volatile and change substantially in short periods of time.

A concentrated portfolio may be more volatile and less liquid than a more broadly diversified one. The fund's investments are concentrated in a particular country or sector, or closely related group of industries or sectors.

The fund invests in emerging market equities and / or bonds. Investing in emerging markets involves a greater risk of loss than investing in more developed markets due to, among other factors, greater political, tax, economic, foreign exchange, liquidity and regulatory risks.

The shares of small and mid-cap companies may be less liquid and more volatile than those of larger companies.

The fund may invest in companies with Variable Interest Entity (VIE) structures in order to gain exposure to industries with foreign ownership restrictions. There is a risk that investments in these structures may be adversely affected by changes in the legal and regulatory framework.

Investing in China A shares involves special considerations and risks, including greater price volatility, a less developed regulatory and legal framework, exchange rate risk/controls, settlement, tax, quota, liquidity and regulatory risks.

The use of derivatives carries the risk of reduced liquidity, substantial loss and increased volatility in adverse market conditions, such as a failure amongst market participants. The use of derivatives may result in the fund being leveraged (where market exposure and thus the potential for loss by the fund exceeds the amount it has invested) and in these market conditions the effect of leverage will be to magnify losses.