Tag Archives: Australia

Australian Bonds Delivered Better Risk-Adjusted Return than Equities

Australian equities and bonds both had double-digit returns last year.  Looking at the one-year returns as of Jan 30, 2015, the S&P/ASX Australian Fixed Interest 0+ Index gained 10.22% and the S&P/ASX 200 (TR) rose 12.48%. While the levels of volatility came down in both markets, the annualized volatility of the S&P/ASX 200 (TR) maintained Read more […]

These Assets Mix With Oil Like Water

While many assets have some relationship with oil, there are varying degrees of correlation and even a few surprises. For example, Canadian equities are more correlated with oil than are the emerging markets and the US equities; Australian equities are barely correlated with oil, and China who is not nearly as big a producer as a consumer is moderately Read more […]

The Great Barrier To Commodities Down Under

This week I am in Australia meeting with investors about commodities.  Usually when I visit a heavy natural resource producing country, the conversations flow easily since the locals understand commodities.  We have been discussing farms, coal, iron ore and tin – subjects that engulf the culture of the locals.  The Australians seem to know all Read more […]

Rotating Australian Cyclical and Defensive Sectors Over Global Economic Cycles

Rotating between cyclical and defensive stocks across economic cycles is a common approach for investors to take advantage of different economic phases. Energy, materials, industrials, consumer discretionary, financials and information technology are traditionally considered cyclical sectors, as stocks in these sectors have tended to be highly correlated to economic cycles. In contrast, consumer staples, healthcare, Read more […]

Could Price Momentum Predict Australian Sector Returns?

Sector allocation is one of the main pillars of equity portfolio management, and its use as a strategy to optimize investment allocations through sector rotation is increasingly abundant. In Australia, the equity market is diversified in sectors, and some of them can be traded through exchange-traded funds, making it possible to implement a rotation strategy. Read more […]

Russia, Where’s The Wheat?

Wheat lost more than 8% in July from the near perfect weather that brought the agriculture sector down to its lowest in four years.  Now, in the first week of August the DJCI All Wheat Total Return is already up 5.4% MTD through Aug 7, despite a 1.2% loss for the day. However, Russia’s food trade ban has implications that Read more […]

Three Reasons to Consider Index Funds

Indexing is an investment approach which simply tracks an index to provide exposure to a market or segment of a market. For the three reasons listed below, it may be a viable complement or substitute to actively managed investments. Firstly, indices outperform the majority of actively managed funds. The SPIVA Australia Scorecard, which is published Read more […]

Global Inflation Beta

It is a familiar concept that commodities have provided inflation protection as discussed in a recent post about a discussion I had with Bluford Putnam, Managing Director and Chief Economist, of our partner, CME Group, to discuss why inflation is likely to appear this year. I have also discussed how much inflation protection has been provided in a special video Read more […]

Money Grows on THESE Trees

My parents used to tell me that money doesn’t grow on trees, but they didn’t know about the Eucalyptus trees in Australia like the one shown below. The science journal, Nature Communications, reported Eucalyptus trees in western and southern Australia absorb gold through their roots and transport it up all the way through their leaves. Read more […]

View from Down Under

The world view in Sydney is quite different than in New York.  No one is worried or disgusted with the US government’s recent shutdown or debt ceiling follies – in fact only a few even comment about it. Likewise much of the anxiety American analysts suffer about the unemployment rate, weak GDP growth and “policy Read more […]