Wednesday, 18 September 2019
Recently trending Most investors are wrong on dividend yield as incomeMy 10 biggest investment management lessonsLessons from the Future Fund for retail investorsFour companies riding the healthcare boomFive reasons SMSFs are making asset allocation changes
Bonds markets have continued to defy the notion that low yields imply low returns, and most investors need the solid foundation that bonds give to a portfolio.
If an investor had been living on the moon or under a rock for a year and returned on 30 June 2019, on seeing their portfolio, they would have thought it was a delightful year full of good news.
Continuing our Interview Series to learn how professional portfolios are managed, we go into the world of global corporate bonds for diversified income hedged into Australian dollars from liquid bond markets.
Green bonds help fund projects focused on issues such as energy efficiency, recycling and waste reduction, but when are they really a 'greenwash' to make the company look good?
Australian bond rates are now lower than during recessions and depressions of the past, but it's not driven by local fundamentals. The world of interest rates is in a place it's never been before in history.
Cash is often seen as the residual, 'uninvested' part of a diversified portfolio, but it should form a prudent and wise amount of ballast, especially when enhanced cash improves returns.
The US inverted yield curve has many worried about whether it indicates a coming recession, but the Fed has moved to a more dovish stance. A diversity of equity and bond exposures is the best way to cope.
Nobody revalues their own home each day in the way they revalue listed equities, but does that mean the value is constant? The daily unit price is calculated in some super funds using unlisted asset valuations.
We like a good debate, and when two opposing views argued about the role of government bonds in a diversified portfolio, a veteran of 30 years in fixed interest stepped in as referee.
Few Australians include global high yield bonds in their asset allocations, but with new ways to access the market locally, they are worth considering as a diversifying asset class.
Government bonds do not feature in most retail portfolios, but they carry defensive qualities with income to offset the higher risks in other asset allocations. Are they always worth including?
Government bonds produced good returns last year, but at the current starting position of lower rates, the cost of defensiveness is probably a limited payoff.
The current yield on a share or trust is simply the latest dividend divided by the current share price, an abstract number at a point in time. What really matters is the income delivered in the long run.
A Chris Cuffe classic article that never ages. Every experienced investor develops a set of beliefs about how markets operate.
The Annual Report from Australia's sovereign wealth fund reveals new ways it is investing in fixed income and alternatives. The Fund considers its portfolio as one overall risk position with downside protection in one asset class allowing more risk in another.
There are strong demographic trends in ageing and consumer spending and investing in the right healthcare companies can ride this wave as well as produce better health outcomes for people.
Substantial changes are underway in SMSFs which until recently held a narrow range of assets dominated by cash, term deposits and Australian equities. Trustees have never faced so many choices.
Changes implemented by super reforms since 1 July 2017 have brought greater incentives for spouses to equalise their superannuation balances, including tax and estate planning benefits.
Specially-selected collections of the best articles
Accredited CPD hours reading Firstlinks
Firstlinks articles are collected in Pandora, Australia's national archive.