Welcome to the farrelly's Dynamic Asset Allocation NZ subscriber-only area...

Welcome to the farrelly's Dynamic Asset Allocation Australian subscriber only area...

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 farrelly's Dynamic Asset Allocation Handbook features editorial exploring investment strategy "hot topics", farrelly's long-term forecasts for asset classes, a detailed review of the long-term forecasts for an individual asset class (rotating across asset classes each quarter) and three asset allocation models to assist with implementation...

This lecture explores the concept of ethics, contemporary issues in financial services as they relate to ethics, and the relevancy and application of ethics in our everyday lives.

Clare Payne | 2.50 CE

This lecture instructs IMAC candidates on the principles of equity securities and analysis including: fundamental investing and analysis; industry analysis; corporate analysis; quantitative investing; momentum investing; value/contrarian investing; and, technical analysis.

This lecture instructs IMAC candidates on the theoretical and empirical underpinnings of portfolio management, specifically in relation to how portfolios are designed and measured.

This lecture instructs IMAC candidates on the statistics used to describe and analyse the risk and return characteristics of securities and portfolios.

This lecture instructs Investment Management Analyst Course (IMAC) candidates on the fundamental of applied economics with an Australian perspective.

This lecture instructs IMAC candidates on how to make decisions about a portfolio's market and currency exposure, and to determine the impact of those decisions on portfolio performance. To various extents, these topics are considered in other IMAC lectures (currency management, asset allocation, performance measurement) and hence this lecture fills the gaps.

This lecture instructs IMAC candidates on properties of debt markets, the investment features and risks of bonds, the application of the time value of money to the valuation of bonds, and the concepts of duration and convexity and their application to bond portfolio management.

This lecture instructs IMAC candidates on the accurate and meaningful measurement and assessment of investment portfolio performance, specifically performance measurement and attribution.

This lecture instructs IMAC candidates on: the primary roles of derivatives in investment portfolios; the difference between futures and forwards contracts and options; the risk and return characteristics of options; risk management strategies using derivatives; return enhancement strategies using derivatives; and, option pricing.

This lecture instructs IMAC candidates on: the multifactor approach to portfolio risk management; sources of risk that may be identified and managed within a portfolio; how risk may be managed using futures and options; Value-at-Risk as a measure of portfolio downside risk; Risk budgeting and Value-at-Risk; and how risk may be decomposed using value-at-risk to measure a portfolio’s overall risk.

This lecture instructs IMAC candidates on alternative asset classes and sub-asset class strategies, portfolio design, performance characteristics, and valuation methods.

This lecture instructs IMAC candidates on approaches to asset allocation (SAA, TAA, DAA), the role of strategic asset allocation and method for setting the SAA, optimisaton, pre-tax return estimates, estimating risk and correlation, and forecast estimation errors.

This lecture instructs IMAC candidates on the drivers of currencies in the short and long term and different approaches to currency risk management for portfolios.

On the positive side - still - is the US consumer, the household sector. On the negative side is synchronised global industrial deceleration, and markets underestimating the negative trajectory of the US/China relationship. Investors need to avoid chasing momentum in equity markets and yield and duration in fixed income markets.

Hindsight has taught us the importance of active core bond funds as an insurance policy and now is the time to consider expanding your investable universe as the secular need for income intensifies.

Rob Mead | 0.50 CE

The rise of intangible assets has created a new level of economic potential for successful businesses. For both growth and value investors, the nature of fundamental analysis must evolve to match an intangible world.

James Kim | 0.50 CE

A broader approach to retirement income, looking beyond yield and incorporating expected return and risk, means some income-generating assets should be excluded from retirement portfolios.

Michael Martel | 0.50 CE

Since the GFC, we have seen a re-emergence of the low growth world which persisted before the 1950s. Investment returns in the 2020s and beyond will be concentrated in a few winners with real earnings growth.

Mark Arnold | 0.25 CE

Infrastructure's ability to provide consistent returns through market cycles, generate attractive long-term revenue streams, and provide diversification makes it a must-have inclusion in portfolios in the 2020s.

John Julian | 0.50 CE

One of the best performing equity sub-asset classes over 20 years is seemingly being ignored. Investors should seriously consider an allocation to Global SMID equities in their portfolios.

Ned Bell | 0.25 CE

Alpha still matters and an active approach can enhance portfolio returns, creating extra saving to be spent in retirement.

Thomas Poullaouec | 0.50 CE

Many investors are reconsidering a strong traditional overweight exposure to Australian equities. But structural forces driving domestic growth continue to support an overweight allocation to Australian equities into the 2020s.

Tim Carleton | 0.25 CE

We can never know for certain how the macro backdrop will change or which investment style will dominate. But focusing on uncovering fundamental earnings leadership tunes out market noise, and enhances returns.

Jonas Palmqvist | 0.25 CE

The conversation with retirees needs to move away from projections based on averages and volatility risk measures, towards a probability-based assessment of running out of money.

Jacqui Lennon | 0.50 CE

In times of lower growth and falling interest rates, volatility strategies can be used to produce a steady stream of income to complement other sources of returns.

Nick Seeto | 0.50 CE

Value investing experienced one of its worst underperformances in the decade since the GFC. As we enter the 2020s, valuations heavily favour value stocks and the data shows that value has a greater than 85% chance of outperforming growth from here.

Charles Dalziell | 0.50 CE

This hypothetical Investment Committee considers three relevant, forward-looking economic and market scenarios which have a reasonable probability of occurring during the next two to three years.

Expert Panel | 1.00 CE

The diverse characteristics of credit markets provides investors the ability to construct robust portfolios, offering investment opportunities suitable for all potential market environments.

Michael Buchanan | 0.50 CE

The significant valuation gap between listed and direct infrastructure markets presents an opportunity to arbitrage value from the two as the gap closes. Understanding the weight of this change into 2020 and beyond is key.

Daniel Foley | 0.50 CE

To achieve a satisfactory return from equities, you must identify high quality forecastable businesses, apply a strict valuation discipline and have the conviction to be different from the herd.

Warryn Robertson | 0.25 CE

Trailing a rising market can feel like missing out - but pure pursuit of highest returns can have unintended consequences. Protecting capital on the downside has a material impact on total returns.

Benjamin Treacy | 0.25 CE

Moving into the 2020s, global equity portfolios should be concentrated and highly selective, positioned to address both fundamental changes in the global backdrop and vulnerabilities in the successful styles of recent years.

Ashley Pittard | 0.25 CE

Somehow the optimal growth/defensive asset split from the 1980s is still considered "balanced" today - never mind that for the first time since the 1930s, the cost of capital is stubbornly static at a negative real return.

Robert Prugue | 1 comment | 0.25 CE

Portfolio managers and investment advisers still too often follow their own values, rather than their clients’, when making investment decisions. In the 2020s, values will move from the periphery to the focal point for successful investments.

Although influenced by logical factors, changes in investment markets are often irrational and illogical. A whole-brain approach to seeking alpha is necessary to win in the investment game.

Philipp Hensler | 0.50 CE

Prior to the GFC, you could build a retirement portfolio on the back of a 7% yield, virtually risk free. Today, without that free kick, a 7% yield is a much harder job, especially from a risk-budgeting perspective.

Jason Teh | 0.50 CE

Limiting overlapping economic exposures more effectively creates concentrated yet diversified portfolios capable of meeting investors’ long-term objectives into the 2020s, while better managing risk.

Donald Huber | 0.25 CE

Focusing on financially material ESG data and systematically including them into investment analysis facilitates 20/20 vision of a company’s risk-return profile.

Masja Zandbergen | 0.50 CE

Whether they realise it or not, investors use factors every time they make an asset allocation decision. Combining multiple factors can help investors increase the chances for investment success.

Antonio Picca | 0.50 CE

If we want a vibrant capitalist future in the 21st century, we need to support ethical legal frameworks for capitalism and practice Conscious Capitalism.

Magatte Wade | 0.50 CE

Portfolio managers don't have perfect vision. Better prediction accuracy results in more concentrated portfolios, higher turnover, higher position limits and higher returns and information ratios.

Jim Creighton | 0.50 CE

The decade since the GFC has been a challenging period for value style equity investing. Not surprisingly, investors are questioning the value of value investing.

Expert Panel | 1.00 CE

The 2010s challenged value investors as, paradoxically, cheap stocks became cheaper and expensive stocks grew more expensive. For those holding their nerve, the inconsistency sets up a good 2020s.

Andrew Clifford | 0.50 CE

Future returns from infrastructure portfolios are less clear due to disruptive forces. Managing these risks requires an unrelenting focus on improving efficiency and customer service.

Peter Meany | 0.50 CE

A deliberate blend of emerging market debt and high yield opens up another universe of liquid, high income opportunities which can offer relative stability in returns and deliver the potential of higher income.

James Blair | 0.25 CE

Artificial Intelligence, Machine Learning (ML), and Deep Learning represent an important expansion of the quantitative investors' analytical toolkit, providing substantial new flexibility.

Joanna Nash | 0.50 CE

Investors want it all from alternatives - keep up with equities in bull markets, and give insurance when markets fall. But true diversification adds independent sources of return to portfolios.

Jason Koo | 0.25 CE

An antidote for a low-rate environment is investing in companies enjoying the benefits of mega-trends, global shifts that are likely to boost demand for the products of a firm over the long term.

Rosie Malcolm | 0.50 CE

Australia has enjoyed nearly three decades of uninterrupted economic growth, but there are sound reasons to question whether this will continue in the future. Five core shifts – industry, urban, energy, land and culture – are needed for Australia to reach its full potential.

Katherine Wynn | 0.50 CE

To succeed within the ever-shifting context in which investment decisions are made, investors should adopt a multi-lens approach. Context matters, and siloed thinking can be detrimental.

Value investing has proven successful over time but it requires discipline and a long-run horizon - and disagreement remains over whether the value premium will persist. What's your philosophy?

A disciplined, scenarios-based approach to determining your views on the outlook for markets is vital for building 20/20 portfolios. Determining investment strategy by analysing issues from a number of viewpoints allows you to arrive at plausible scenarios for how the future may unfold.

The growing proportion and influence of older workers in the labour force will provide support for the equity market going forward.

A new study shows that retirement savers demonstrate a strong preference for trusted managed fund brands over unbranded funds - but unbranded funds are strongly favoured over poorly trusted fund brands.

Susan Thorp | 0.50 CE

The definition of the "alternative investment" asset class is one of the most debated and important. What is your philosophy?

Retirement village contracts have their pros and cons. The contracts are really a type of complex insurance or financial product. Comparison shopping is very difficult but possible.

Timothy Kyng | 0.50 CE

Each February, our Markets Summit program kicks off with a video retrospective of the key events of the prior year...

For the first time in a decade, bonds can compete against equities on returns. High quality, investment grade corporate bonds can deliver mid-single digit returns for a third of the volatility of equities.

Only by making the effort to understand and align investment beliefs with values can we get a sharper understanding of our clients' true objectives and provide solutions that will really meet their needs.

More than one third of Australians think there is widespread corruption in the banking and finance sector.

Rebecca Huntley | 0.25 CE

The subtle channels can be so powerful that they communicate information without us knowing it. Body Linguistics, EQ and awareness are the keys to understanding others.

Yvette Alcott | 0.50 CE

Practitioners need to know what words to use and lose - and be able to apply that knowledge - to improve their conversations with clients about fees, regulations and investment strategies.

Gary DeMoss | 1.50 CE

Individuals live as part of a broader system of interconnected networks and relationships. There are advantages - for you and for them - in thinking about the client as part of a family dynamic.

Joanne Earl | 1.00 CE

There is scientific consensus that five major personality traits explain much of the behavioural differences between individuals - linking to financial outcomes, and preferences for advice.

Herman Brodie | 0.50 CE

Helping clients is about more than just educating them as to the right decision, it's also about helping them to actually take action.

Michael Kitces | 1.50 CE

The way investors respond to the language of financial services can be influenced by using the right words, avoiding others, and structuring messages to overcome skepticism.

Gary DeMoss | 0.50 CE

This panel, which considered key takeouts from Finology Summit 2019, commenced with an overview of a 2018 global study on how well financial advisers know their clients.

Expert Panel | 0.50 CE

Behavioral diagnostics represent the cutting edge in understanding clients, detecting what clients reveal about themselves through their decisions.

Pat Spenner | 1.00 CE

Helping clients is about more than just educating them as to the right decision, it's also about helping them to actually take action.

Michael Kitces | 0.75 CE

It is time to align client portfolios with risks they face - requiring a deep understanding and evidence-based approach to uncovering and forecasting client goals.

Wade Matterson | 0.50 CE

Persistent earnings revisions ultimately drive share price performance. Understanding and capturing this predictable pattern enhances portfolio returns.

Nikki Thomas | 0.50 CE

There is evidence to suggest that biases lead to behaviours that can negatively impact Australian investor portfolios.

Peter Brooke | 0.50 CE

The complexity of multiple and often conflicting investment objectives is matched by an increased desire to simplify - giving way to some dangerous misinformation.

Rudi Minbatiwala | 0.50 CE

Stars are celebrated yet funds management is a team pursuit. Behavioural finance tends to focus on individuals' biases, but teams' behaviour determines results.

Douglas Isles | 0.50 CE

Emerging markets are full of undiscovered opportunities and hope. Assuming failure may seem a counter-intuitive way to invest, but it is an effective way to avoid behavioural biases.

Every financial adviser has access to the same products and portfolios – we must differentiate our advice value and specialisation, innovate new business models, and focus on the client experience.

Michael Kitces | 0.75 CE

We must fully understand a fund’s performance to achieve best practice portfolio construction and recommend client solutions that truly reflect their investment beliefs and avoid unwanted biases.

Michael Furey | 0.50 CE

Helping clients is about more than just educating them as to the right decision, it's also about helping them to actually take action.

Michael Kitces | 0.75 CE

The Big Five personality traits offer insights into the behavioural headwinds (or tailwinds) clients might encounter in achieving their financial goals, and the most effective way of dispensing advice to them.

Herman Brodie | 1.00 CE

Human beliefs, biases and behaviours are central to the behaviour of financial markets, causing financial and economic instability to persist.

Hamish Douglass, Andrew Canobi, Brett Gillespie, Tim Farrelly, Charles Jamieson, Peter Kim, Stephen Miller, AJ Qualtieri, Randal Jenneke, and Thomas Vester convened to debate their Markets Summit 2019 key takeouts and the portfolio construction implications.

Expert Panel | 1.00 CE

Few clients have the 20-year horizon required for today’s strategically-oriented models to become consistent with suggested outcomes, such as CPI+4%. This builds in a structural mismatch.

Michael Kelly | 0.25 CE

Investors are so focused on predicting the end of this economic cycle they have missed the fact that it simply won't. A recession will be avoided and the cycle will extend.

Bob Michele | 2 comments | 0.25 CE

It’s a Quantitative Tightening world and the tide is receding. QT appears set to continue in 2019 and bonds should continue to perform well.

Brett Lewthwaite | 0.25 CE

Banks are a defensive fixed income investment. This may sound counterintuitive only a decade removed from the most prolific financial crisis of our lifetime.

Attilio Qualtieri | 0.25 CE

Nearly a decade after one of the great debt binges of all time, Chinese economic growth and credit creation have slowed. Today, stimulus is being undertaken. This is not a crisis, this is reform.

Julian McCormack | 0.25 CE

As recessionary pressures continue to build, rotating portfolios toward high grade, defensive assets will prove to be a prescient asset allocation decision for investors.

Charles Jamieson | 0.25 CE

The vast majority of emerging market economies are fundamentally healthy and are being driven by broad thematics, not just evolving consumption patterns.

Projit Chatterjee | 0.25 CE

While infrastructure is known as a defensive asset class, it is set for enormous growth over coming decades, making it an attractive investment proposition for years to come.

Sarah Shaw | 0.25 CE

Recent central bank decisions have strengthened the conviction that the New Neutral is a global reality which will have long-term implications on investment decisions.

Rob Mead | 0.25 CE

Global high yield corporate bonds represent an attractive asset class for investors searching for a diversified source of income.

Adam Grotzinger | 0.25 CE

The best chance for survival among what were regarded as the most defensive of stocks is to be the biggest, most revered brand – or at least hold second spot. Others will struggle and many will disappear.

Vihari Ross | 0.25 CE

Easy money in credit markets is gone, and corporate bonds face more risk for less return. Structural liquidity deterioration raises a black swan risk of a disorderly sell-off spilling into other markets.

Gopi Karunakaran | 0.25 CE

The new normal is a world of higher systemic risk, which implies portfolio managers will need to dig more deeply into their tool kit of risk-understanding and mitigation techniques.

Randal Jenneke | 0.25 CE

Returns in emerging market equities have been disappointing in recent years. But the stark rise of populism in the western world may actually present an opportunity for many emerging economies.

Thomas Vester | 0.25 CE

Slowing growth with extreme recession risk, coupled with a combative populist government, may well see Italy trigger a crisis in European debt and the currency, causing a substantial global volatility event.

Vimal Gor | 0.25 CE

Rates are normalising, populism is on the rise, technology is driving disruption. But not every perceived winner will win and not every perceived loser will be destroyed forever.

Jacob Mitchell | 0.25 CE

On some measures, global equity valuations are the most attractive in several years. Risks, however, have certainly increased and in many cases are more difficult to frame.

Ronald Temple | 0.25 CE

For most of the last 10 years, the world's major central banks have been creating significant amounts of cheap money, inflating several bubbles. Those bubbles are beginning to burst.

Chris Watling | 1 comment | 0.25 CE

Much macroeconomic analysis is very narrow in scope. ESG factors are ignored all together. A new indicator of national progress measures economic dynamism and progress on meeting ESG goals.

Stephanie Kelly | 0.25 CE

Two of the defining characteristics of the global investment landscape over the last 30 years are being reversed - globalisation (by economic nationalism) and finalisation (as we've reached peak debt).

Jonathan Pain | 0.50 CE

Yes, it’s possible that we enter a recession in the not too distant future. But the best curve to forecast recessions still has a positive slope.

We see three scenarios for 2019 - is it a benign outlook like 2016? A bubble bursting like 2000? Or will inflation accelerate?