Everyone knows the Australian share market is overweight financial and resource stocks, and underweight technology, health care and energy stocks, compared to the world share markets. Given our home country bias, Australian advisers need to plan and manage sector allocation as well as country allocation. Here's a tool which may help...
The bigger the better, right? Fund size, that is. The sentiment is understandable, but those adhering to it might be disappointed. Conventional wisdom in the funds industry suggests that the larger the fund, the harder it is to achieve excess returns, and a recent paper from Lazard suggests this is more true for growth managers, than value managers...
Delegate feedback from our second annual conference - THE Investment Conference 2003 on 18/19 August 2003 in Sydney - was very, very positive. And with 50 investment experts presenting during 30 sessions over the two days, it was in the words on one delegate "no junket". Critical Issues Forum presentations can be accessed via this article...
As our opening keynote at THE Investment Conference 2003 (18/19 August 2003), we asked Don Stammer, independent chairman of the PC Forum Asset Allocation Board, to provide a context for our two day program, by looking ahead to 2010 and hypothesising as to what the global economic landscape will look like, identifying the big political, social and economic trends ahead, and describing what they mean in terms of positioning portfolios today for the future...
This was the standout, most popular session of THE Investment Conference 2003 presented by PC Forum on 18/19 August 2003, earning a stunning 4.7 out of 5.0 average rating across all delegates. As our day 2 opening keynote, independent strategist Jonathan Pain looked at investment theory, its history, its relevance and what current valuation models imply for future returns. He argued we need to radically alter the way we construct portfolios, if we are to build portfolios that are in our client's best interests - and then walked us through what this means for the conventional asset management model...
Most asset allocation processes require you to decide asset class returns and volatility. In a (increasingly heated!) debate at THE Investment Conference 2003 (18/19 August 2003), carefully selected investment experts "dropped their trousers" and showed us their income, growth, and total returns expectations over the next year, and the risks to them...
Most managers shy away from forecasting currencies - but for a session at THE Investment Conference 2003 (18/19 August 2003), we uncovered a few brave souls who were willing to put their necks on the block, addressing issues like "can the A$ keep going up, and if so, how much?", "Is the US$ losing its supremacy, and what effect would this have on world markets?" and "Which currencies may emerge in its place?"...
Most of us hear "property" and think "listed". At THE Investment Conference 2003 (18/19 August 2003), we devoted a session to challenging this assumption. Is listed property really an asset class? What diversification does it provide in a portfolio? And if it's so great, why don't researchers and fund managers allocate more to it? Fund managers have begun going offshore for property - what benefits does that bring to a portfolio?...
What should your asset allocation models look like going forward? Is strategic and tactical asset allocation past its "use by" date? Proponents of different asset allocation approaches argued their merits and weaknesses at THE Investment Conference 2003 (18/19 August 2003)...
Always amongst the top three most popular sessions at THE Investment Conference 2003 (18/19 August 2003), the researchers and asset consultants show what they've got up their sleeves for the next year, presenting their asset class models - that is, the securities they've blended together in each asset class...
"The economics are good, it’s the psychology that’s bad," said Dr. Robert Goodman, Senior Economic Advisor at Putnam in Boston U.S in his wide-ranging presentation at the recent BT Financial Group Leaders Forum 2003 in which he concluded that "a bidding war is about to break open among companies using dividends as a way to bribe back shareholders." If you missed Dr Bob's presentation, following is an edited transcript...
“Equities are undervalued due, in part, to the misvaluation between equities and bonds,” said Paul Bagnoli, Director of value manager Bernstein's International Product Development, speaking to advisers at last week's 2003 AXA Expo. Predicting that this so-called misvaluation between equities and bonds will result in a 9% return from the US equity market over the next year, he added “we can justify this modest prediction”...
The U.S. is the only driver of the world economy, contended Robert Gottliebsen, National Business Commentator for The Australian, speaking at last week's 2003 AXA Expo. And in his view, the housing effect is the single biggest reason Australia came out less scathed then the US in recent financial times...
The diversification effect of fixed income in a portfolio has increased quite dramatically in the past three years, explained Greg Cooper, Director of Schroder Investment Management Australia at last week's Portfolio Construction Forum Researchers' Roundtable. Here are full minutes (notes plus slides) of Greg's presentation...
With the risk of war in Iraq at very high levels, Dr Don Stammer, the Portfolio Construction Forum Asset Allocation Board's independent chairman, shares his thoughts about the similarities and differences to the 1991 Gulf War, and how the global economy is affected by the threat and actuality of a war in the Middle East.
The global economy is at an inflection point that continues to produce a favourable US bond environment, according to Doug Hodge, Executive Vice-President of PIMCO, speaking at last week's FEAL February 2003 Briefing Series. The difference this time, he contends, is that US policy makers get it. They have the will to combat deflationary risks, with Japan as an example.
Nothing like a "slap in the face" from reality to send people back to basics. According to some, abandoning traditional asset allocation is the answer. So how important is asset allocation? Research shows it explains 40 per cent, 90 per cent AND 100 per cent of fund performance.
In the US, more than half of all equity funds are managed by a team, leaving a lot of solo "star" managers. US-based Bloomberg Wealth Manager recently highlighted a US study looking at which performs better - solo managers or investment teams?
Inflation has long been the scourge of Central banks everywhere, but ever since Alan Greenspan used the ‘d’ word last September, deflation has replaced inflation as the spectre troubling economic policy makers.