The illiquidity premium offers strong value over the cyclical horizon. A combination of interest rate, credit and illiquidity risks provide diversified fixed income exposures with attractive return potential.
Structural factors will ensure that the cash rate cannot rise over the medium term, resulting in negligible cash returns. A core fixed income exposure consisting of Australian government bonds will outperform cash over the long term.
Fiscal stimulus and the vaccine have fuelled an extraordinary rally in equities - but, ultimately, stocks are at record highs because of extraordinarily low market interest rates. Investors should be wary of inflation, but also of being underweight equities.
A generation of great international economists is passing from the scene. Richard Cooper, Robert Mundell and John Williamson each made important contributions on a variety of topics including to the ongoing debate about optimal currency arrangements.
Supply chain decision makers must continue to focus on mitigating risk in 2021, not maximising growth. Political risks outbalance opportunities.
With a healthy consumer, accommodative policy, accelerating GDP and the potential for herd immunity from Covid-19, the risk of a US inflationary overshoot has increased. We believe any inflation scare, however, will be short-lived.
Rather than accepting lower returns for liquidity, investors should go back to the drawing board and re-assess their need for daily liquidity.
These two papers provide useful insights into how investors' attitudes and behaviours evolve over time, and how our beliefs are distorted if we experience positive or negative prior returns.
There is a growing debate about whether the inflation that will arise over the next few months will be temporary, reflecting the sharp bounce-back from the Covid-19 recession, or persistent, reflecting both demand-pull and cost-push factors.
Our diverse panel debated which of the high-conviction propositions they heard at Markets Summit 2021 resonated most strongly, which they disagreed with most - and the portfolio construction implications.
This Research Roundtable focused on the Colchester Global Government Bonds strategy, with senior practitioners deciding, after briefings, Q&A and debate, their individual rating for the strategy and whether to include it on a hypothetical APL and/or multi-manager portfolios. Afterwards, the meeting is truncated and published for on-demand viewing by all members.