Why passive investing now won’t deliver all your goals

Why passive investing now won’t deliver all your goals Passive investment funds used to be a relatively obscure part of the market. But with their popularity soaring in recent years, many investors might now be sceptical about paying for active investment. Market performance over recent years would reinforce that scepticism. Holding a passive mix of mainstream assets has performed very well over the last 5 years. For example, an investor who suffers a permanent 25% …

Environmental, Social and Governance (ESG) Wrap 15 March 2018

Environmental, Social and Governance (ESG) Wrap 15 March 2018 Welcome again to the Environmental, Social and Governance (ESG) Wrap, where our team share the latest ESG issues in the media and their implications on investment. This month the key ESG issues making headlines are: ‘Silent boycott’: Gen Ys dump scandal-hit brands but stay quiet about it How blockchain is strengthening tuna traceability to combat illegal fishing Plastic and Waste in the Spotlight The Pimlico Plumbers case …

A slip in house prices is no reason to panic

A slip in house prices is no reason to panic The current slide in Sydney and Melbourne residential property prices will fall far short of a housing bust, according to AMP Capital Head of Investment Strategy and Chief Economist, Shane Oliver. House prices in Sydney have fallen about 5 per cent this year from last year’s peak, and eased slightly in Melbourne according to Oliver, who adds that both markets may have further softness ahead. “I …

Tariffs, Trump, North Korea and other global political risks in the Year of the Dog

Tariffs, Trump, North Korea and other global political risks in the Year of the Dog Key points Geopolitical issues generate much interest as dinner party conversations but don’t necessarily have a significant impact on markets, apart from a bit of noise. But given a backlash against economic rationalist policies, the falling relative power of the US & the ability of social media to allow us to make our own reality, geopolitical risks are higher than they used to be. Key …

Where’s all the share market volatility coming from?

Where’s all the share market volatility coming from? There is quite a lot of talk about volatility coming back to share markets all of a sudden, and with the talk there’s also bit of conjecture about where the volatility originates from. Some say it’s because interest rates and bond yields are beginning to rise; others will point to the end of quantitative easing in the United States and elsewhere for the bumpier ride. The return …

The Australian economy – five reasons growth will continue but unlikely to be enough to justify rate

The Australian economy – five reasons growth will continue but unlikely to be enough to justify rate Key points The Australian economy grew 2.4% through 2017, good but well below potential given high population growth. There is good reason to expect growth to continue and pick up a bit: the drag from falling mining investment is nearly over, non-mining investment is turning up, public investment is strong, trade should add to growth and profits are …

The pros and cons of investment bonds

The pros and cons of investment bonds Also called insurance or growth bonds, investment bonds can be a tax-effective way to save for something big. If you’re saving for a particular goal, looking for an alternative to super, or want to ensure those who matter most are taken care of after you’re gone, investment bonds (also known as insurance or growth bonds) may have benefits while potentially reducing what you pay in tax. If you’re wondering how …

What the rise of the $A means for global investors

What the rise of the $A means for global investors The recent rise of the Australian dollar has been surprising but not confounding for experts who believe the its natural level is closer to US70 cents. Indeed, it’s the weakness of the US dollar that’s pushed the Australian dollar higher relative to the benchmark currency in recent weeks even though US economic growth and a resurgent commodities segment had most market watchers expecting the Australian …

Are Australian households more vulnerable than we think?

  Are Australian households more vulnerable than we think? A lot has been said and written about Australia’s household debt levels and possible implications on the banking system and the economy more broadly. But could Australian households be even more constrained than the headline numbers are suggesting? Michele Bullock, the Reserve Bank of Australia’s Assistant Governor, highlights the stresses households will likely be facing well before any rise official interest rate materialises in this speech. Bullock points …

The “gradually” maturing investment cycle – what is the risk of a US recession?

The “gradually” maturing investment cycle – what is the risk of a US recession? Key points With inflationary pressures starting to rise in the US the global investment cycle is starting to get more mature. This is likely to mean a further rise in bond yields and more share market volatility. However, there is still little sign of the sort of excesses that precede economic downturns, profit slumps and major bear markets suggesting that we …