MIM Insight

Managed futures as an alternative?

Since the Global Financial Crisis, there has been an increased interest in investments which display low correlation to traditional asset classes and that are able to deliver returns across a range of market conditions. One such asset class is CTA (Commodity Trading Advisers), more commonly referred to as ‘managed futures’. In this MIM Insight, we explore managed futures strategies and discuss why they may offer diversification benefits to a portfolio.

What's in the pipeline for 2013?

Following on from our MIM Insight in April 2012 'US shale gas: a good news pipeline', over the last year there have been further developments to support a favourable outlook for the North American energy sector. This year our focus has turned to crude oil, which in 2012 saw the largest annual increase in production in US history.

Managing bonds in a low yield world

In recent years, yields have reached extremely low levels compared to history. How should bond investors respond to this? Do we totally ignore the low-yield levels, choosing to focus instead on the outlook for future conditions? Or do we choose not to hold bonds but invest in cash in order to ensure no money is lost if yields rise? Is there another approach that avoids both extremes?

2013: more sustainable growth ahead?

The Macquarie Research team, discuss the outlook for the Australian economy in 2013, specifically in relation to the new mindset of businesses and households, less effective monetary policy and the risk the Australian economy could contract if mining investment falls more sharply than expected.

Asian equity markets - primed for investment

Investing in Asia over the last 12 months has not been without its own set of challenges but it continues to be a region we strongly believe deserves greater attention. In our view, Asia ex Japan remains primed for investment as it remains one of the fastest growing regions, even with the highly publicised slowdown in China. In this MIM Insight we detail the key markets within the region and the variance in drivers and investment opportunities.

Seven lessons from the Global Financial Crisis

The global financial crisis was the most significant event to ever hit Australian corporate bond markets. Investors and managers can learn much from such a significant event. This MIM Insight considers seven lessons for consideration in the management style of funds that hold credit related instruments.

(Un)fixed income - investment returns explained

Investment performance is at the forefront of investment decisions, but how can investors determine a sensible approach to investing in such volatile market conditions? In 2012, we saw a significant divergence in return among the fixed income sub-sectors. We believe that to achieve your desired investment outcomes from investing in fixed income, more attention must be paid to understanding where performance stems from.

Big picture decisions for Australian equities in 2013

Markets in 2011/2012 have been dominated by four big themes. In the face of GFC2 fears, investors have preferred the safety of defensives and chased dividend yield over capital growth. These big macro themes may once again dominate thinking in 2013, but how will the year ahead compare to 2012?

Rethinking investing in an unconventional world

The fixed income team explore how the use of unconventional monetary policy measures in the midst of what has been labelled a ‘balance sheet recession’ has created an environment of lower growth and falling yields. Income-focused investors adopting the appropriate strategic response may find a window of opportunity exists despite the challenging conditions.

Infrastructure - an alternative source of income

Did you know? The average dividend yield of global infrastructure has historically surpassed that offered by broad market global equities, and currently exceeds the yield of many fixed income securities. As investors around the world search for ‘income’, the unique and long-term benefits of global infrastructure securities should be considered.

Is "risk-off" too risky?

The Listed Equities team discuss how market uncertainty over the past 12 months has led to Australian investors selling growth and cyclical stocks in favour of defensive stocks. This trade has been dubbed a "risk-off" trade, however, the team highlight that there are still risks in "risk-off" investing. Additionally, if market conditions improve in the near term, investors may find that expensive defensives will not compare favourably to cheap growth or cyclical stocks.

Great expectations - and the great funding mismatch

The concept of entitlement is over a hundred years old and has instilled in us a belief that we are owed something for nothing. Unfortunately, this sense of entitlement has created a significant mismatch between our expectations and reality, especially when it comes to superannuation. The reality is that if we sit idle and expect to receive what we believe we are entitled to, we are in for a starkly disappointing future.

The changing face of growth in China - sustainable growth

The Asian equities team provide an overview of China’s shorter term growth prospects and consider the structural trends that Australian investors should be aware of when investing for growth.

Term deposits - still creating interest?

Market volatility since the Global Financial Crisis has seen investors seeking refuge in bank deposits, prioritising investment certainty through a renewed focus on capital preservation and attractive Term Deposit (TD) rates. However, with the RBA reducing cash rates, TD rates have been coming down and are likely to continue to fall. In this article we address concerns over the likely direction of TD rates and consider alternative investment options for those investors who seek to preserve capital and generate a return above the cash rate.

US shale gas: a good news pipeline

Significant technological advances have enabled a surge in investment in the production of shale gas, in what is widely acknowledged as the most noteworthy energy development in the United States in a generation. As a result, listed infrastructure investors can identify attractive opportunities, particularly in pipeline and related infrastructure names.

Lifting the lid on hybrid securities

The recent resurgence of the issuance of hybrid securities is providing further investment opportunities for those investors seeking ‘income-based’ securities. As with any investment opportunity, investors need to exercise caution and conduct rigorous analysis. Investors should be aware that hybrids are not homogenous securities but are structured differently, each with their own terms and conditions. This article highlights some considerations for assessing the relative merits of a particular hybrid.

The Great Underfunding

Many Australians have the potential for a nasty surprise in retirement if they are unaware that their superannuation is underfunded. While Australian Superannuation has great advantages over many other countries through the Superannuation Guarantee Legislation, this article discusses some of the shortfalls in superannuation, along with some suggestions to avoid disappointment and regret.

The shift to income

With the financial world likely to continue to be dominated by global deleveraging, the capital gains investors became accustomed to prior to the Global Financial Crisis will be more difficult to achieve. This is likely to lead investors to seek more stable and income producing investments. Additionally, an aging population will likely lead to increased demand for income generating assets. The combination of these two structural themes has resulted in what we have termed "the shift to income".

Consumption - Investing in Asia’s next phase of growth

Asia presents fantastic long-term investment opportunities for those willing to do the work on the ground. Underpinning Asia's long-term growth is consumption; a sustainable structural trend that when combined with a large, relatively inefficient small to mid-cap market, presents us with a compelling investment opportunity.

Income investing: opportunities in a world where deleveraging rolls on

Our fixed income product specialists look at global deleveraging and how this presents compelling opportunities for fixed income investors to receive elevated income levels on credit investments.