The quarterly Dynamic Asset Allocation is published electronically, and emailed to subscribers in early March, June, September, and December. It features farrelly's Editorial; long-term outlook for markets; Forecast in Focus; and three different approaches to Implementation...
The fact is that we don't NEED growth. We need high after-tax returns. High growth at a reasonable price will always be attractive. But so too will no-growth at a high risk-adjusted yield.
This lecture instructs IMAC candidates on the fundamentals of investment portfolio performance measurement and attribution.
This lecture instructs IMAC candidates on the fundamentals of the portfolio review process.
To say a lot has changed since I spoke to you back in February at Markets Summit 2020 is an incredible understatement. Between now and Markets Summit in February 2021, I'm going to be watching three things.
This lecture instructs IMAC candidates on the principles of investment manager selection and blending in portfolios.
This lecture instructs IMAC candidates on the principles of various portfolio risk management strategies.
This lecture instructs IMAC candidates on practical issues in setting a strategic asset allocation for a portfolio.
This lecture instructs IMAC candidates on principles of international investing.
This lecture instructs IMAC candidates on the foundations of asset allocation in three parts - key principles of asset allocation, optimisation and how to define an asset class.
In a world where interest rates are zero or negative, we need new ways of valuing assets. This is a very common refrain and it drives me nuts. It is almost all wrong - and on so many different levels!
The world today is an acceleration and escalation of the world that existed before Covid-19, rather than a whole new world. Broad, multidisciplinary thinking is essential.
For investors needing more from their fixed income allocation, global convertible bonds offer a whole new world of opportunity.
The tech-wreck of the early 2000s was ground zero for the birth of a succession of Australian technology companies that have disrupted markets and established themselves as global leaders.
Incumbent investment frameworks such as Value, Shorting, Passive and Index Aware strategies are failing. Going forward, successful investors will need to be extremely selective when allocating capital.
Post Covid-19, Australian company dividends were cut by 30% overall but it is still possible to achieve 5% cash yields with up to 2% franking credits from a well constructed portfolio.
While it may not be a new approach, ESG investing creates risk-aware portfolios that are more likely to outperform over the long term.
Post GFC, inflation risk skewed to the downside with central banks fighting against disinflation and deflation – and the market is potentially under-pricing inflation risks going forward.
Since the early 1980s, developed market government bond yields have broadly been falling, with investors voicing concerns that the asset class offered little or no value. Continually, they have been proven wrong.
Investors should not attempt to time, but rather allocate to well-diversified and balanced multi-factor portfolios and provide consistent exposure to targeted factors.
Covid has accelerated tech adoption on an unprecedented scale and while the winners have been broad, not all are equal. Short-term investors with simple valuation techniques are missing the bigger picture.
This lecture instructs IMAC candidates on the fundamentals of client discovery and formulating an Investment Policy Statement in the investment consulting context.
It turns out that 'retiring’ and withdrawing from productive life actually conflicts with our own natural drivers of well-being. The concept of ‘retirement’ is an obsolescent by-product of the industrial era that needs to be retired.
Now in its 19th year, Portfolio Construction Forum Strategies Conference has gained a reputation as THE portfolio construction strategies conference of the year. This year's theme is "It's a whole new world!". Covid-19 is disrupting societies, economies, and markets around the world like no other crisis since World War II. Strategies Conference 2020 will challenge and refresh your portfolio construction thinking as we debate the contemporary and emerging portfolio construction strategies that will help us build better quality investor portfolios in a whole new world!
The Investment Management Research Program is the academic research unit of Portfolio Construction Forum, the specialist, independent provider of portfolio construction continuing education, accreditation and certification services in Australia and NZ. The IMR Program aims to advance investment management research by curating courses, workshops and symposia focused on the spectrum of issues involved in designing and building investment portfolios.
During accumulation, the concept of portfolio longevity is quite meaningless. Eventually, peak-wealth is achieved and withdrawals exceed investment gains. Managing portfolio longevity becomes critical.
The impact of Covid-19 and the resulting massive worldwide government fiscal response to the crisis has sparked new discussion about the risk of an upsurge in inflation - or deflation. This is not a trivial debate.
Despite difficult times in recent years, momentum has been the factor that has generated the highest returns over the past 50 years. Three new papers on the topic take us into largely new territory and improve our understanding on how markets operate.
One of the touted benefits of hedge funds is that they provide returns that are largely uncorrelated with other risky assets. In practice, hedge funds returns are highly correlated to equity markets during downturns - when it matters.
As ESG investing has leapt into the investment mainstream, it has become the focus of much academic research. Recent findings show that despite the many positive ramifications of ESG investing, it reduces the efficiency of markets and can introduce risk exposures in portfolios.
If on 1 Jan 2020, I’d thought we’d see US unemployment head to 20%, China’s first quarter real GDP growth at -10% and the global economy shut down, I wouldn't have picked the S&P PE Ratio would now be above its long-term average since the GFC.
With crisis comes opportunity. Much of the bad news is now reflected in stock prices and, while stock markets will re-test their lows in coming weeks, expect a rally during Q2 2020.
For active fund managers, the coronavirus pandemic is unlike any other crisis in modern times. In this podcast, Jonathan Ramsay of InvestSense speaks with emerging market equities portfolio manager, Tassos Stassopoulos, about the impact of values on responses to COVID-19 around the world, and the art of contrarian stock picking and managing client monies in these challenging times.
Coronavirus has put an end to the longest post-war US expansion, and is all but certain to cause a recession that will be wholly different from any other in economic history. In this podcast, Robert Huebscher speaks with renowned economist, Dr Woody Brock, about how and why.
This is a time to be buying not selling. Question marks remain as to how far this market will fall before it bottoms out. But what we do know is that valuations are attractive. The chances of long-term investors earning returns well in excess of Term Deposits over the next five to 10 years are very, very high.
Over shorter periods of time, there are market inefficiencies due to well researched behavioural biases. Knowledge of these can help improve our own investment decision making and that of our clients.
Several of our Faculty discuss their key takeouts from Finology Summit 2020, to help delegates think through how people's different investing biases, beliefs and behaviours impact investment outcomes.
Using the language of client values and behaviour will help build a foundation of trust, and assist investment advisers architect a portfolio that is in sync with clients' lives and values.
Behavioural biases get in the way of good investment decision-making. A well-structured approach to goals-based planning can go a long way to defeating the worst impacts of many of these biases.
A fixed point of reference, in the context of investment risks and uncertainties, can induce biases in approaches to meet client objectives. These biases will be costly to investors in the long term.
As we scramble to make sense of occurrences such as coronavirus and climate change, the application of prior cultivated imagination can preserve the integrity of investment decision making.
Established in 2016, Finology Summit is THE behavioural finance ("fin") and investment psychology ("ology") program of the year. The 1.5-day, face-to-face and online learning program is designed and curated by our specialist, experienced and independent team and features an exceptional Faculty of experts from around the world. Each offers his/her best high conviction ideas on behavioural finance and/or investor psychology, and the investment implications.
Markets Summit 2020 facilitated debate on the key drivers of and outlook for the markets (on a three- to five-year view) - with particular emphasis on being alert to the high VUCA risks and opportunities ahead - to aid your search for return, and to help you build better quality investor portfolios.
In the decade ahead, ageing demographics, income inequality, market share concentration and climate change will reshape the economy, elevating the VUCA facing investors, requiring deep fundamental research to determine where best to invest.
After a blockbuster 2019 for bond returns, investors should moderate their return expectations while watching for VUCA events and tail risks, especially trade, Brexit and the US elections.
VUCA issues are going to increasingly drive market outcomes. Mapping out different scenarios is a must to check your biases as well as challenge your own, others' and consensus views, and generate investment ideas that help manage VUCA and target the right opportunities.
VUCA is alive and well. The environment requires a disciplined, risk-based approach that considers the direction of market risk appetite to identify the right assets at the right time.
Our diverse panel of experts debates which of the high-conviction propositions they heard during Markets Summit 2020 resonated most strongly, and which they disagreed with most, and the portfolio construction implications.
Bull market longevity tells us nothing about the timing of the next bear market. Valuations are a helpful warning, but don't inform us on the timing because the trigger is normally a shock.
The current VUCA environment creates opportunities for investors to increase diversification and income in their diversified portfolios, using carefully selected, higher yielding parts of the credit market.
As the old certainties break down, the response from policy makers has been to stimulate economies. The liquidity provided is particularly evident in longer dated growth assets. In the context of the Australian market, Australian mid caps is the sweet spot.
The world has checked into Hotel California – interest rates are failing to stimulate demand and monetary policy is less effective. Successful adaptation will require a re-think of traditional strategic asset allocation approaches.
Trade Wars, the US Election, Brexit 3.0, natural disasters and pandemic risks are causing fear and uncertainty in Australian equity investors. The key to capturing opportunities is to focus on what matters to long-term returns.
Investors are facing a "Code REDD" with reflation, election, duration and disruption all key themes. The reflation theme is favouring a rotation into more cyclical sectors, lower duration assets and lower rating bonds.
High household debt places Australia in a fragile position for further disinflation, implying that bond yields will remain lower for longer. Investors should look to accumulate bonds and ensure portfolios have an appropriate defensive allocation in anticipation of the next downturn.
Corporate bond spreads are now tighter than they were before the GFC, yet corporate leverage is higher. Buy financials, sell corporates.
Venture capital is evolving globally to deliver both financial outcomes and also significant and measurable social impact for investors, entrepreneurs and communities.
Established in 2009, Markets Summit has gained a reputation as THE investment markets scene setter of the year. The jam-packed, one-day, face-to-face and online learning program is designed and curated by our specialist, experienced and independent team and features our Faculty of 25+ leading investment thinkers from around the world. Each offers his/her best high conviction ideas on the key drivers of and outlook for the markets (on a three- to five-year view) – with particular emphasis on being alert to high VUCA risks and opportunities ahead.