Fixed versus Inflation Linked Government Bonds – Sep 2010 The above chart shows the yields of 2 different types of government issued bonds…Fixed Rate and Inflation Linked. Given they both have the same maturity, September 2010, the difference in the yields must therefore represent the market’s expectations of inflation. As the chart demonstrates, the yields …
Category Archive: Uncategorized
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Feb 15
A Compelling Income Story
Source: UBS I normally wouldn’t rely on a single statistic or chart to influence an investment decision but the above chart almost changes that. What we see is that for the first time in almost 40 years (maybe longer if I had the data) the trailing dividend yield for Australian shares is sbove that of …
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Feb 11
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Chart 1 When you see on the news that Oil is at or below $40US per barrel after peaking at $147US in the middle of 2008, its very frustrating when to see petrol prices around $1.10 to $1.20 per litre at the pump.Chart 1 shows that between January 14 and January 21 the price of …
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Feb 10
Mortgage Funds – still $1???
I’ve had enquiries from numerous advisers wanting to invest their client’s money into mortgage funds. Thanks to the Rudd Government’s deposit guarantee many mortgage fund investors decided to redeem their funds and shift to the more secure bank deposits. Unfortunately for the funds and their remaining investors the level of redemptions were so great, the …
Feb 04
Target Date Managed Funds – the next big managed fund in Australia?
There’s a big trend in the USA for target date retirement funds. These are managed funds whose goal is to provide funds for a specific date and the investment strategy is such that it invests in equities in the early part and progressively switches to bonds through to maturity whereby the majority of funds will …
Feb 03
No Relief yet for those looking for longer term loans
In recent weeks I’ve spoken with a few people who were waiting for the Reserve Bank to drop cash rates before looking to fix their mortgages for the long term. The chart above shows the change in government bond yields from last Thursday (29 January) to today (3 February) after the Reserve Bank dropped interest …
Jan 28
Investment Thought for the Day
With the reporting season before us, an uncertain economic outlook both globally and locally, investing in Australian Shares today is fraught with danger. If seeking equity risks, irrespective of attractive valuations, I believe dollar cost averaging is the only way to go. Send article as PDF
Jan 27
Asset Class Views
Cash Expectations are quite strong that short term interest rates will drop quite rapidly due to slowing global and Australian economy Australian Fixed Interest General expectations are that investors will continue to move from equities to bonds and cash due to a current environment of risk aversion. Downside risks are that bond prices are at …
Jan 23
Thoughts on the outlook for bonds
Bonds were not surprisingly the highest performing asset class in 2008. Advisers can expect increased promotion of bonds by BDMs and fund managers and the issuance of new products (eg the new Vanguard Australian Government Bond Index Fund). What is our view? · Australian Bonds: Neutral, with a likely move to underweight· International Bonds : …
Jan 22
Active Management Struggles in 2008
The Morningstar rankings for all major asset classes were released this week and once again, the results do not look particularly promising for active managers in the fixed interest and property securities asset classes. Some of the more interesting outcomes for investment returns at the end of 2008 include: Fixed Interest Results… Vanguard and Barclay’s …