|
Hedge Clippings | Friday, 05 March 2021
Over the past couple of months the spectre of the re-emergence of inflation has spooked bond markets, which in turn has rattled equity markets. Or should that be the other way around? Either way, inflation that was seemingly dead and buried has shown signs of life, in spite of, or maybe because of, COVID and the varying effects it is having on economies around the globe.
Locally in Australia the short sharp recession we experienced has been replaced by a bounce back that could be likened to a bungee jump - thanks to the multiple and contrasting levers of the lock down, government support & stimulation, early super withdrawals, and travel bans that leave Aussies, normally inveterate overseas travellers, nowhere to go but... here.
So an economy that should be struggling isn't, and some sectors (retail, electronics, home wares, etc.) have never had it so good. Domestic tourism, which was facing oblivion at the height of the pandemic, is booming. The housing market, which was facing predictions of a major correction 12 months ago, is at record levels, in spite of the absence of its normal drivers of immigration, and overseas buyers.
Meanwhile, the RBA is determined to keep interest rates low and the system awash with liquidity. All of the above is creating conflicting signals, hence no doubt why equity markets are nervous. There has not been a widespread sell off or correction (yet), as each dip is being hailed by some as a buying opportunity, with others remaining in the market for FOMO.
Based on February fund performances received so far, the early indications suggest it was a difficult month: These kinds of markets make it as hard for active managers as they do for the longer-term investor, but as always, some will rise above the crowd. This week we checked in with Dean Fergie from Cyan Investment Management to see how his fund, which targets the IPO, small and medium cap sectors, had travelled over the past 12 months, and what he sees in his crystal ball for the year ahead. You can watch the video here.
News & Insights
New Funds on Fundmonitors.com
Video interview with Dean Fergie from Cyan Investment Management
Should equity investors fear higher bond yields? by Ophir Asset Management
Why I don't think we're headed for a correction by Montgomery Investment Management
|
