“One of the real wildcards in recent history has been the performance of commodity stocks. We don’t see a sudden recovery, but we suspect that prices are near rock bottom levels and the second half of 2015 could be the base period in which they come back from,” the report says.

“Energy and the bulk commodities, in addition to base metals, have experienced horror numbers. A huge amount of shareholder wealth has been destroyed. The Australian dollar and terms of trade decline have reflected this perfectly.

“Yet we’re starting to open up to the idea that maybe the large and well diversified names – like BHP for example – are about to turn around their fortunes in the New Year.

“Glencore’s panic selling may have been a sign of the bottom. The rally was purely ridiculous, we would be completely staying away from that type of volatility. But BHP in the mid-$20 range is a different matter. We spoke about it as an attractive exposure to consider next year at our end of month October webinar. Our team is watching price action very closely and we wouldn’t be surprised to see a slightly positive outperformance in earnings (considering market expectations are already low) in February.”

Invast believes timing is everything and the bulk commodities and energy stocks have been absolutely discarded in this huge commodities sell off. Invast believes they deserve a close eye from time to time, as part of a well-diversified thematic portfolio.

Peter Fay

Peter Fay, Director of Research with brokerage firm Invast Australia, says while the decision by China to end its one child policy is welcome news for Blackmores and Bega Cheese given the announcement of a new joint venture into the highly lucrative infant formula market, investors buying Blackmores stock at this stage need to be cautious.

“For us, it’s a trading stock rather than a buy-and-hold proposition,” said Mr Fay.

“We saw stocks in Danone rise as much as 3% in Paris and Nestlé up as much as 0.7% on the back of this news. Whilst this increase is not overly significant, it did come on a day when European markets were broadly lower and the hype around Blackmores’ Chinese performance is much greater than it is with these two multi-nationals.”

Mr Fay said caution must be shown after Blackmores surged 13% yesterday to close at $175.51 after hitting a record high of $200.04 after the group said it was confident of delivering strong full-year profit growth after a surge in first-quarter sales. Bega Cheese rose 15% to close at $5.70 after hitting a record high of $6.02.

“These gains represent a meteoric 100% rise in the last three months for Blackmores, so investors are likely to want to start booking some profits,” said Mr Fay. “Already we’ve seen the stock fall in trade today as some investors recoup spectacular gains; our first support is at around the $156 level.”

“If you keep your stops tight and look at technical levels such as previous highs and lows and try trading the momentum, there is the potential for some good short-term trading profits to be made,” Invast said in a note on the stock last week.

Mr Fay said that after 2013’s loosening of the one child policy for certain demographic areas, birth rates did not rise anywhere near what was expected. “With China’s increasing middle class and the fact China’s loosening of policy mainly effects the more urbanised areas, where birth rates are traditionally lower, this policy is likely to be less effective at raising the birth rate than the Chinese government hopes,” Mr Fay said.

China’s birth rate of around just 1.7 births per women is low, even by developed country standards. Australia’s total birth rate in 2014, for example, was 1.80 babies per woman, down from 1.88 in 2013, according to figures released yesterday by the Australian Bureau of Statistics (ABS).

“Australia is a comparatively tiny market so even small gains in the birth rate in a country as populous as China can have a big impact on the demand for highly trusted Australian food and health items,” said Mr Fay.

Invast Australia has recently launched its PortfolioInvestor thematic platform, which offers clients an innovative means to take advantage of key market themes. In one click, investors can strategically invest in professionally constructed thematic portfolios of Direct Market Access (DMA) CFDs over global shares and ETFs. Popular themes include Ageing Population Australia, Bullish Australian Property, Iconic Australian Brands and Takeover Targets Australia.

While Invast says the dollar looks fairly resilient around the US$0.70 range, Australia could see a surprise November or December rate cut, with the gap until February possibly too long for the RBA if it doesn’t pick up any improving sentiment for the Australian economy, according to the report.

The report also notes two key themes emerging from Invast’s recent trip to China, which are impacting on the local property market and potentially the retail sector.

“We spoke to many investors who confirmed that the slowdown is probably worse than what is being reported in the official numbers. The rich and wealthy Chinese investors who had the means and capacity to shift investments overseas have been a major driving in the Australian property market.

“The expectation is that the middle class – who has also benefited from the recent Chinese economic growth story – will start looking offshore to invest and potentially migrate…There is the potential to have further impacts on certain parts of the Australian property market.

“We don’t buy the media narrative that the slowdown in China is negative for the Australian property market and rather see the middle class shift as becoming a major boost for Australia,” the report says.

In terms of the retail sector, “we identified companies like Alibaba, Baidu and JD.com as key exposures that every single trader should be aware of. These companies have numbers that will make your jay drop. We outlined the scope of these investments (all listed in the US) during our monthly webinar.

“These aren’t just disruptive for China, but also potential global competitors. For example, JD.com is considering an expansion into Australia which will see the Chinese online retailer potentially pinning Amazon.com to become the first truly global online retailer with an Australian operation.

“It could potentially not only disrupt traditional retail, but many of the online retailers themselves who have been importing from Chinese manufacturers and selling to Australian consumers. JD.com removes that middle market opportunity. It links the Chinese manufacturers directly with Australian consumers with a same day delivery fulfillment.”

Gavin White

Self-managed superannuation funds (SMSFs) allocated record amounts into Australian cash investments in the June quarter of 2015 despite falling interest rates, but virtually ignored overseas assets, despite returns being pumped up by a falling Australian dollar, according to Gavin White, Chairman of Invast Australia’s Investment Committee.

SMSF assets dipped slightly during to quarter to $589.9 billion in the June quarter of 2015, down from $600.3 billion in the March quarter, with Australian share holdings dropping to $187.1 billion from $199.3 billion during the quarter, in line with the falling share market. SMSFs’ Australian share holdings represented almost one-third of all SMSF assets, according to new data from the Australian Taxation Office.

SMSFs invested just $1.8 billion in international shares in the June 2015 quarter, or less than 1% of their portfolios, while they invested a mere $533 million in offshore managed investments and $329 million in offshore property.

In contrast, SMSFs’ holdings of cash and term deposits jumped to $157.7 billion, another fresh record, up from $155.7 billion in the March quarter, with cash investments now representing around 27% of all SMSF assets.

Invast’s Gavin White said the numbers highlight a huge home investment bias, which is potentially harming investment returns for most SMSFs and exposing them to huge risks if the local share market corrects more than those offshore.

“SMSF portfolios often lack any basic degree of diversification into overseas assets given their huge concentration on Australian equity and cash investments. The problems with this are two fold. First, investors are missing out on often superior returns offered by offshore financial markets, with the S&P/ ASX 200 well underperforming the US stock market, and underperforming most European markets over the past year.

“SMSFs are missing out on booming sectors, such as the all-important healthcare and technology industries, for example, which aren’t well represented in the ASX/ S&P200, while they have overdosed on bank and resources shares,” Mr White said.

“The second problem with not diversifying offshore is that Australian SMSF investors are missing out on currency depreciation benefits. If SMSFs have offshore investments denominated in offshore currencies such as the US dollar, to the extent that the Australian dollar falls, investors will gain some returns back on their unhedged international investments, which works to offset losses on their Australian investments if the local share market falls.

“Given we can expect sustained weakness from the Australian dollar, this means many SMSF investors are missing out on an important risk buffer offered by a falling local currency,” Mr White said.

Invast Australia is a wholly-owned subsidiary of Invast Securities, which is listed in Japan. The company is expanding its local presence, with a strong focus on sophisticated clients and institutional relationships.

Brendan Gunn

Invast Australia has announced the launch of its unique thematic investing product, which enables investors to select from a range of professionally constructed thematic portfolios across local and international stocks exchanges and capitalise on key trends, with its ‘Diversified Asset Bearish’ strategy up an impressive 77.2% over the past year.

The PortfolioInvestor platform offers clients an innovative means to take advantage of key market themes, in one click, by strategically investing in professionally constructed portfolios of Direct Market Access (DMA) CFDs over highly liquid global shares and ETFs, said Invast CEO Brendan Gunn.

“These portfolios consist of a collection of stocks relating to a specific market theme or trend. Some of the popular themes among investors include ‘Ageing Population Australia’ and ‘US Cyber Security’. Other themes include ‘Bullish Australian Property’,  ‘Iconic Australian Brands” and ‘Takeover Targets Australia’,” said Mr Gunn. “These are unique and well researched themes. The ‘Diversified Asset Bearish’ strategy, for example, enables investors to benefit from falling markets and the numbers speak for themselves – that strategy is up an amazing 77.2% over the past year (to September 4, 2015) and 9.5% higher over the past month*.

“The strategy is unique in that it is composed of just four securities – all short positions on major diversified markets. The best performer has been the short position on the oil price, up an amazing 192.4% over the past year,” Mr Gunn said.

“The PortfolioInvestor platform currently has around 30 investment themes which investors can chose from. Each of these themes is carefully considered, measured and analysed by our investment committee and diversified enough to ensure that one single stock cannot have a large impact on overall performance. A portfolio of themes further adds to diversification,” said Mr Gunn.

“As the ‘Diversified Asset Bearish’ strategy has shown, investors can benefit from rising and falling markets, and this strategy could provide a handy hedge as part of a very well diversified portfolio, especially given the likelihood of further stock market volatility ahead,” said Mr Gunn.

Invast Australia is a wholly-owned subsidiary of Invast Securities, which is listed in Japan.  The company is expanding its local presence, with a strong focus on sophisticated clients and institutional relationships. Each of its themed portfolios, known as Strategic Investment Portfolios (SIPs), are constructed by the Invast Investment Committee, comprising some of the most distinguished multi-asset investment experts in the industry.

“With PortfolioInvestor, we have taken the hard work out of selecting and investing in individual stocks so investors you can easily act and take advantage of economic trends,” said Mr Gunn. “Research analysts explore key trends, ideas and global market themes to identify the best opportunities for submission to the Investment Committee, who then decide on the portfolio weighting to maximise exposure to the specific theme. The innovative platform has already attracted much interest since being offered to investors and Invast is now ready to disrupt the investment and finance sector,” said Mr Gunn.

* Past performance is not indicative of future performance. The calculation of the returns is based on the performance of the actual underlying securities, in accordance with the weighting envisaged by the portfolio. These performances exclude financing and commission costs.

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Brendan Gunn

Invast Australia has announced the launch of its unique thematic investing product, which enables investors to select from a range of professionally constructed thematic portfolios across local and international stocks exchanges and capitalise on key trends, with its ‘Diversified Asset Bearish’ strategy up an impressive 77.2% over the past year.

The PortfolioInvestor platform offers clients an innovative means to take advantage of key market themes, in one click, by strategically investing in professionally constructed portfolios of Direct Market Access (DMA) CFDs over highly liquid global shares and ETFs, said Invast CEO Brendan Gunn.

“These portfolios consist of a collection of stocks relating to a specific market theme or trend. Some of the popular themes among investors include ‘Ageing Population Australia’ and ‘US Cyber Security’. Other themes include ‘Bullish Australian Property’,  ‘Iconic Australian Brands” and ‘Takeover Targets Australia’,” said Mr Gunn. “These are unique and well researched themes. The ‘Diversified Asset Bearish’ strategy, for example, enables investors to benefit from falling markets and the numbers speak for themselves – that strategy is up an amazing 77.2% over the past year (to September 4, 2015) and 9.5% higher over the past month*.

“The strategy is unique in that it is composed of just four securities – all short positions on major diversified markets. The best performer has been the short position on the oil price, up an amazing 192.4% over the past year,” Mr Gunn said.

“The PortfolioInvestor platform currently has around 30 investment themes which investors can chose from. Each of these themes is carefully considered, measured and analysed by our investment committee and diversified enough to ensure that one single stock cannot have a large impact on overall performance. A portfolio of themes further adds to diversification,” said Mr Gunn.

“As the ‘Diversified Asset Bearish’ strategy has shown, investors can benefit from rising and falling markets, and this strategy could provide a handy hedge as part of a very well diversified portfolio, especially given the likelihood of further stock market volatility ahead,” said Mr Gunn.

Invast Australia is a wholly-owned subsidiary of Invast Securities, which is listed in Japan.  The company is expanding its local presence, with a strong focus on sophisticated clients and institutional relationships. Each of its themed portfolios, known as Strategic Investment Portfolios (SIPs), are constructed by the Invast Investment Committee, comprising some of the most distinguished multi-asset investment experts in the industry.

“With PortfolioInvestor, we have taken the hard work out of selecting and investing in individual stocks so investors you can easily act and take advantage of economic trends,” said Mr Gunn. “Research analysts explore key trends, ideas and global market themes to identify the best opportunities for submission to the Investment Committee, who then decide on the portfolio weighting to maximise exposure to the specific theme. The innovative platform has already attracted much interest since being offered to investors and Invast is now ready to disrupt the investment and finance sector,” said Mr Gunn.

* Past performance is not indicative of future performance. The calculation of the returns is based on the performance of the actual underlying securities, in accordance with the weighting envisaged by the portfolio. These performances exclude financing and commission costs.

The post INVAST Australia launches unique thematic investing product appeared first on AdviserVoice.

As the first step in the expansion, INVAST has recruited Brendan Gunn and Andrew Taylor as CEO and COO respectively.

CEO Brendan Gunn has more than six years in foreign exchange and CFD broking and was responsible for growing GFT Markets (Sydney) to the become one of the largest CFD and Forex trading houses in Asia Pacific.   Mr Gunn will be responsible for growing the business locally and developing the model to take the business to other markets.

COO Andrew Taylor has in excess of 20 years experience, also most recently with GFT Markets.  Mr Taylor’s financial markets knowledge crosses borders and asset classes, with a strong focus on investment and debt management for both business and individuals.  Mr Taylor will be responsible for managing the business operations including staff recruitment, IT, compliance, dealing and product development. 
 
Mr Gunn said it was the goal of INVAST to provide education and develop long-term relationships with its clients.

“The 50 plus year Japanese heritage of INVAST has built a culture focused on precision, integrity and high standards.  We are very excited to be leading the initiative to share INVAST’s expertise and vision with other markets.   This office is the first outside of Japan and it will provide a gateway to Asia and build a blueprint for global expansion,” he said.

Mr Gunn said a focus on relationships, educating clients on risk management techniques were central objectives of INVAST, culminating in a better trading experience.

Our focus with all our clients, be they SMSF investors, professional or simply brand new traders, is to provide education, risk management and help them become better traders.  We seek to match the right product with the right level of trader.  We also design and build a number of innovative products with inbuilt risk management tools, which we believe will be market firsts in Australia. ”

Mr Gunn said INVAST also provided partnership arrangements for institutional investors and financial advisers.

Mr Gunn said Invast would be operational in Australia by Q3 this year.