International equities gained the popular vote as the ‘winner’ asset at the inaugural BlueChip Communication Asset Wars held in Sydney last week.
This event brought members of the investing and funds management community together to hear some of their peers put the case for a range of different asset classes in volatile times.
In the end it was Principal Global Investors Australian CEO, Grant Forster, who convinced an audience of some 100 guests that global stocks offer more appeal than the other asset classes represented on the night: Aussie equities, commercial property, cash and fixed interest.
The event was presented by BlueChip Communication as a light-hearted book-end to another volatile year that has seen investors seeking the ‘holy grail’ of the ‘right’ asset allocation for the current environment. Each presenter had five minutes to make the case for his or her asset class, was asked to answer a question with notice, and respond to audience Q&As from the floor. Judging was via the highly scientific means of an audience-fired clapometer.
Mr Forster put a strong (and highly entertaining) case for Australians to diversify beyond what he described as the limits of the local sharemarket: “four banks, two grocers, two mining companies …” pointing out that robust company earnings in offshore stocks – particularly in emerging markets – present a sensible option for investors to consider as part of a diversified portfolio.
“While Grant and international equities won the popular vote, it was a very close run thing. And the real winner on the night was diversification,” said BlueChip managing director, Carden Calder.
“Taken as whole, the presentations spoke volumes for the benefits of appropriate diversification across all asset classes,” she said.
As well as Principal, BlueChip clients from Hyperion Asset Management, RaboDirect, QIC and Centuria Property Funds each presented an argument for Aussie equities, cash, fixed income, and unlisted commercial property respectively. Highlights included:
- Hyperion managing director Tim Samway, exhorting investors not to confuse due diligence with diversification – and highlighting that the Australian equity opportunities are out there for investors which examine the fundamentals and invest in quality rather than ‘rubbish’.
- RaboDirect Executive Manager of RaboDirect Australia and New Zealand Greg McAweeney, underscoring the value of certainty from cash – and urging investors to check that they are not paying unnecessary fees and choose genuine high interest savings accounts, not ordinary transaction accounts.
- Susan Buckley, Managing Director of QIC Global Fixed Interest, letting the performance of fixed income speak for itself, pointing to ongoing returns of 8% or more in recent times as some other asset classes have struggled to deliver any positive returns at all.
- Jason Huljich, CEO of Centuria Property Funds zeroing in on the lower volatility and higher returns of unlisted commercial property compared to its listed counterpart, along with its non-correlation with equities providing genuine diversification and a counter-cyclical buffer in the portfolio.