Optimistic optimism: strong returns to both Australian and global equities
This week’s Investment Matters will focus on different asset classes, their relative performance, and our broad thoughts on the implications of tactical asset allocation decisions.
When we survey benchmark performance, we see that Australian and Global equities portfolios have delivered returns well above expected long-term returns for those asset classes this financial year.
Revisiting takeovers
we’ve maintained higher weights in cash holdings within property sub-portfolios with an expectation that a significant rises in interest rates would necessitate an increase in cap rates (implied returns on property values), a resultant reduction in property book valuations and trigger a resultant slew of equity capital raises at discounted share prices in order to restore balance sheets to within bank funding covenants.
While the dull shine of copper comes in focus, we shed little light on BHP. Similarly, our focus this week on financial services dives deeper than the four major banks.