Videos: Fund Manager Q&As
With Abbey Road back in the charts and the We Co rocket failing to launch, it’s a good time to remember that cashflows still drive value, even when value is hard to find.
In a political and economic landscape where extremes are the new normal separating signals from noise is important. We review recent market events and juxtapose the suite of yield stocks to The Truman Show.
Collapsing interest rates and bond yields have driven exceptional performance in many perceived interest rate sensitive stocks over the past year. Somewhat surprisingly, this has been accompanied by exceptional gains at the more speculative end of the market. Should we expect more of the same for the 2020 financial year?
As interest rates approach zero in much of the western world, the linear relationship which economists expect from their monetary intervention isn’t quite going to plan. Rather than igniting animal spirits and spurring spending, declining rates are creating insatiable demand and stratospheric prices for safe haven assets whilst doing nothing for the velocity of money and economic activity.
The renewed demand for REITs illustrates an acceptance that a long period of low growth will persist. Trying to find growth in that investment landscape means Australia’s tech darlings continue upwards – with valuations unseen since the tech bubble in 1999/2000.
While finding long-term sustainable profits remains the goal for any investor, ebullient valuations in Australian Equities persist. As an area of increasing focus, sustainability encompasses more than earnings and has many perspectives. Martin Conlon, Head of Australian Equities, discusses the need for a holistic and considered approach to sustainability, sharing his views on coal.
As low interest rates persist following the backing away from ‘normalisation’, the markets will focus on areas where long-term value is defined as longer than six months, and on businesses where a short-term earnings result won’t derail its potential.