Investment Articles & Insights

It’s not often that the Fed cuts rates by 50 basis points in one move. It surely indicates the Fed is worried about the state of the world’s largest economy. If that’s the case, global investors, including in Australia, should sit up and take note. The key question at this juncture is: does the Fed’s urgent action indicate a US recession is looming?

You may remember the pre-2021 years when Cathie Wood’s ARK Innovation fund was riding high as one of the strongest performers in the global fund management sector. Her philosophy, strategy, stock picking, and track record were all working in her favour. Investors were even in the habit of following Cathie into stocks whenever the ARK Innovation fund purchased a new position.

In recent years, emerging markets haven’t exactly been a sure-fire opportunity for investors. Many have retreated after a decade of flat earnings, turbulence in China, and more attractive returns from the US exposure, resulting in emerging markets trading at lower valuations than their developed market counterparts.

Welcome to the match. It’s time for a showdown between the green and gold of the Australian equity market and the red, white, and blue of the American stock market. Both countries are fierce competitors with successful track long term records so we can expect a hard-fought match. We’ll assess our competitors based on three key factors: 1) historical performance, 2) EPS growth, and 3) valuations. It’s fine to cheer for your team during the match, but please keep it respectful.

Blackstone and Canada Pension Plan Investment Board have agreed to acquire AirTrunk, an Australian digital infrastructure business, for $24 billion. It’s great news for the AirTrunk investors who will reap the rewards of an enormously successful exit. It also highlights the attractions of infrastructure investing, particularly in the fast growing digital infrastructure space. With deals like AirTrunk highlighting the opportunity, it may be worth asking: have you got enough infrastructure exposure?

Remember how you felt about yield when interest rates were at historic lows? In those days when yield was scarce, investors placed a higher value on it, and it was of greater importance to investment valuations. Then everything changed when the developed world’s central bankers raised rates at the fastest pace in history. Yield suddenly became more abundant, and the market took some time to adapt to this altered market environment. In short, it was bad news for yield-focused investors who had to watch their capital values fall as yields rose.

Active fund management has long provided investors with easy access to professional management expertise across a range of asset classes. With equity markets reaching high valuations driven by tech stocks, stock picking has arguably become more important than ever. So it may be an ideal time to increase your exposure to active funds with the stock picking expertise required to navigate what’s coming next in financial markets.

The promise of interest rate cuts by the Fed and the RBA has been the main reason to be bullish about unlisted property funds for some time now. It’s been a long wait, but it looks like we’re nearing the expected interest rate easing cycle, at least in the US. So is now the ideal time to consider revisiting the unlisted property fund sector? We investigate.