The following extract was taken from David Swensen’s book, “Pioneering Portfolio Management”, and for those who don’t know who David Swenssen is…he is the Chief Investment Officer of the Yale Endowment Fund and possibly the finest multi-asset class investor ever. “Foreign currencies, in and of themselves, provide no expected return. Some market players, as part …
Category Archive: Uncategorized
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Oct 27
You have to love Investment Banks…NOT
Apparently UBS (Investment Bank) says “Myer Float reasonable priced”…see Business Spectator article here. A few weeks ago I was at a presentation by UBS Global Asset Management’s head of Australian Equities, Simon Shields, and he didn’t quite say the same thing. In fact he provided some fairly simple advice on floats and in particular the Myer …
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Oct 02
Another Furey View on Capital Protected Investments
Coinciding with reduced sharemarket volatility, capital protected products are reappearing from the usual issuers and are looking a little more attractive than those that appeared leading up to 30 June 2009. Despite this, their lack of transparency around pricing, complexity in terms of the make-up of returns, and their lack of simplicity in explaining their …
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Sep 16
Relating the Risks of Bonds to Recent Times
If you are interested in an educational article on the main risks a bond investor faces and how those risks have played out over the past year or two, please visit this link. Send article as PDF
Sep 03
Economic Growth does not mean High Equity Returns
One of the more frequent queries I receive is from planners who want to invest their client’s funds into high economic growth countries of India, China, and emerging markets. My response is fairly standard in that I wonder why they believe that would provide their clients and the response is typically along the lines of …
Aug 27
Bond Fund Correlations
The above chart shows the 6 month daily correlation between Hedged Global Shares and four Australian bond funds… Tyndall Australian Bond UBS International Bond Macquarie Diversified Fixed Interest Principal Global Strategic Income Fund Each fund is different. Tyndall is invested in high grade Australian bonds, UBS International in high grade global bonds, Macquarie is 60% …
Aug 21
World Government Bonds perform best over last 5 years
The above table shows the returns for various subclasses of fixed interest from the perspective of the Australian investor (i.e. in Austrlaian dollars) through to the end of June 2009. As can be seen, the World Government Bond index hedged to Australian dollars has been the winner over the last 3 and 5 years. High …
Aug 06
Yield Curve looking Good…is it too good?
As the above chart shows, the Australian government yield curve has been steepening ever since the end of last year. This yield curve is a good indicator of the future strength of the AUstralian economy. As it shows, during June of 2008 the curve was negative (i.e. sloping downwards) and worst case scenario, is that …
Aug 03
Apples and Oranges of Volatility
My latest IFA educational article can be found here. Recently I met with a fund manager who was showing me how his direct property fund had lower volatility than the listed property index. Given the infrequency of direct property valuation, volatility measures, like standard deviation, should probably be ignored. My latest article published in IFA …
Aug 03
Alpha does not equal Outperformance
An article I wrote earlier in the year for IFA magazine can now be found here. Basically the article shows how it is possible to outperform and index but display no skill (or alpha); and vice versa…i.e. underperform an index and show skill (or alpha). Send article as PDF