Monthly Archive: March 2012

Mar 28

Bonds…the best protection from risky markets

Source: van Eyk The above chart shows the 12 month correlation of monthly returns between the UBS Composite index (representing Australian Fixed Interest) and the total return of the S&P/ASX All Ordinaries index (Australian¬†shares). As you can see the correlation between both asset classes is extremely variable and the trendline shows that over the last …

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Mar 27

Does our Super have too much in equities?

Over the last couple of weeks I’ve been asked to comment on the asset allocations of default super funds. There’s certainly been a very interesting debate through the print media which was probably started by David Murray, Chairman of the Future Fund, last year when he stated that Austrlaian Super Funds were too heavily invested …

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Mar 20

Australian Government Bond Yields…approaching normal

Well…not normal yet. The shorter part of the curve suggests the market is expecting another two 25bps cuts by the RBA but with the Euro sovereign crisis well and truly looking much better its highly unlikely there’ll be any cuts soon. Whilst there’s plenty of evidence that shows the Euro sovereign crisis has improved, nothing …

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Mar 15

Having a crack at Goldman Sachs

Yesterday, the New York Times published details of a resignation letter of a very senior Goldman Sachs employee who totally ripped into the culture and product flogging mentality of Goldman Sachs. For anyone interested in the letter, whcih is quite an entertaining read for those of us in the industry, here it is…¬†Goldman Sachs Letter. …

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Mar 13

Corporate Bond ETF or Big 4 Bond ETF????

I was quite excited to see the launch of the new Russell Select Australian Corporate Bond fund over the past few days. I thought the ability to have a diversified Australian bond fund that has the ability to provide a bit of credit risk for a more diversified portfolio would be great. Unfortunately when I …

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Mar 10

SPIVA…Australian Small Cap managers demonstrate skill

The SPIVA report was released a few days ago and as I’ve mentioend before it is my favourite assessment of the success of fund managers because it takes into consideration survivorship bias…in other words, if you want to know who are the best fund managers over the last year, then you start with all fund …

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Mar 06

Australian Bond Yields…still edging up

Source: RBA I know the above chart is a couple of days old but there’s not much change since last Thursday. At its simplest what it shows is that the bond market is still expecting the Reserve Bank to decrease interest rates some time during the year…with 1 year bond yields at less than 4%, …

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Mar 04

Portfolio vs Asset Allocation…potential pitfalls

Many financial planners recommend their clients follow a particular Strategic Asset Allocation that may be based on the output of the combination of a risk profile as well as matching the client’s needs. For example, a popular strategic asset allocation for a “balanced” portfolio may be along the lines of… Australian Shares 35% Global Shares …

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Mar 01

A Letter from Zilch Capital…

This link from The Economist was passed onto me today and is a hilariously written letter from a fictitional hedge fund manager to its investors. I have reproduced the full letter below (I hope The Economist doesn’t mind) … Dear investor, In line with the rest of our industry we are making some changes to …

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