Category Archive: Portfolio Construction

Aug 26

Real Return funds…lacking real-ity?

What a fascinating investment world its been over the past few months. We’ve had concerns about Greece exiting the Euro, commodity price crashes, a Chinese sharemarket crash and now some of the biggest developed economy sharemarket declines since the dark days of the GFC. Volatility has been somewhat benign for a long time thanks to …

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Feb 21

A few simple thoughts on a few not so simple markets

Following are my recent thoughts around markets with many charts to support these views. These views are far from complete but do represent a reasonable summary at this point in time. Income Assets   Source: RBA, Delta Research & Advisory The above left chart suggests the market believes the cash rate is heading towards 1.5% …

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Aug 01

Ramblings about Unconstrained Debt Funds and Portfolio Construction…wonkish and a work in progress

I’ve just returned from a manager research trip in the UK where we visited a variety of strategies from a variety of managers and fortunately for me, with some of the leading thinkers and researchers in the advice industry (hat tip D&G … and I don’t mean Dolce and Gabbana). Several of the managers we …

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May 05

Revisiting Asset Weighted Returns and the Lifecycle Fund

Given the start of MySuper this year, superannuation trustees have released numerous lifecycle funds to satisfy this new legislation. Whilst lifecycle funds have been popular among superannuation trustees, the investment and adviser community haven’t been so complimentary. Either way, lifecycle funds definitely have a place in the investment landscape and they provide an approach to …

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Jun 14

To find alpha, first define it

A couple of months ago I presented at a Portfolio Construction Academy forum of around 70 financial planners and researchers about constructing investment portfolios and fund manager assessment using risk factors. From what I can tell the session went quite well and much to my relief the feedback was quite positive. Following the presentation I …

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Feb 11

A quick look at equity and bond markets

Source: www.incrediblecharts.com As the above chart shows the Australian Sharemarket has had a stellar run over the last 3 months. Not a hint of volatility just upwards she goes from around 4350 to just short of 5000…throw in a very small number of dividends and its a superb return. Newspaper talk has suggested that there is a …

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Nov 29

Investing in Asia…a wild ride irrespective of its economy

I just did an interview with Money Magazine about investing in Asia and I have to admit that it is one of the most popular requests I’ve had in recent years from advisers and/or their clients. The main reason for the request is that investors want exposure to the strong Asian economic growth story (which …

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Nov 09

Beating the Inefficient Fixed Interest Benchmark

Its widely agreed that size-weighted fixed interest benchmarks are a poor construct when it comes to creating the optimal fixed interest portfolio. The logic from most people goes along the lines of “why would I accept the index as optimal and overweight my portfolio with the biggest issuers because they are the riskiest and more likely to default …

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Nov 09

Managed Volatility…the next popular equity strategy

There’s a brief article in today’s Investor Daily News that comments on “Managed Volatility” being the strategy to maximise returns…article here. I have to admit that I believe this strategy will be one of the new trends in equity focused managed funds over the next 12 months or so. Empirical evidence over the years the …

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Sep 18

Australian Government Bond Yield Curve…no change???

Source: RBA, Delta Research & Advisory Bizaarely as it seems but the above chart shows that over the last month the Australian Government Bond Yield curve has barely budged. There’s really no more than 5 to 10 bps difference across all terms and when you consider the various big announcements, economic results from here, overseas …

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