Dynamic asset allocation a critical strategy in uncertain economic times

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Investment managers need to take a dynamic asset allocation (DAA) approach that accounts for cyclical risks in an unpredictable global economy, says Zenith Investment Partners. DAA considers the potential risk to portfolio positions and how markets might move over a three-month to two-year horizon, compared to strategic asset allocation (SAA) that reflects return and volatility

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Did you hold ‘em or did you fold ‘em?

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In our September 2020 article “Amateur investors beware: you’ve got to know when to hold ‘em, know when to fold ‘em”, we highlighted the dangers of a ‘do it yourself’ approach to investing. By the end of August 2020, popular stocks, defined as those with strong brand recognition and historic price momentum, materially outpaced the

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Winning by not losing

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Share markets have endured a tumultuous start to the year, with the war in Ukraine, lockdowns in China and inflation anxieties relegating COVID-19 news flow to the back pages. In this environment, timing when markets will reach their nadir becomes notoriously difficult to achieve and we implore investors to overcome the temptation to make hasty

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The great fixed income rout – were we really blindsided?  

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With the sell-off in domestic fixed interest markets over the past seven months, the sea of red ink was a painful reminder of the risks of investing in bonds. The -11% drawdown in the Bloomberg AusBond Composite Bond index from its peak in October 2021 has only been matched by the 1994 calamity where bonds

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Infrastructure’s pathway to net-zero

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As the world attempts to move towards carbon neutrality, companies and fund managers are facing increased scrutiny regarding emission levels. Unsurprisingly, listed infrastructure’s level of carbon intensity is higher than broader equities, owing to its exposure to the utilities sector. For investors seeking to limit heavy carbon emitters in their portfolio, an exclusionary approach to

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Zenith sector report: Australian shares – small companies

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Zenith Investment Partners has released its sector report on Australian shares – small companies. In it Zenith says it believes the best fishing spot for active managers is the Australian small cap pond, which is represented by the S&P/ASX Small Ordinaries Index.  “A diverse and under-researched opportunity set gives an active manager the best chance

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Don’t play Russian roulette with portfolio construction

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While tensions have been building over several years, the Russian invasion of Ukraine has still been a shock to most observers. The impact on lives and livelihoods is, of course, the main issue here and like everybody we hope for a peaceful resolution soon. In our sphere, financial markets, the focus is on the implications

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The fisherman’s advice to the billionaire – why Australian small caps is the place to fish

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Years before he became a billionaire hedge fund manager, William “Bill” Ackman, founder of Pershing Square Capital Management, trekked 10,000 kilometres to go fishing. Although Ackman had never fished a day in his life, the trip was a success due to his guide, Oliver White. While White had no prior knowledge of the investment industry,

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Problems loom for conservative choice products in 2022 YFYS performance tests

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Conservative choice products will be challenged by the Your Future Your Super (YFYS) performance test, with a number of problems and inconsistencies in the new regime set to be revealed, says Chant West general manager, Ian Fryer. “So far, the performance test has been applied only to MySuper products which, overwhelmingly, have growth-style portfolios. Already,

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Inflation threat and the impact on markets

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It is becoming an increasingly challenging environment to achieve investment return objectives, and the asset allocation strategies that have worked for the past decade are unlikely to continue to be successful for the next, according to Zenith Investment Partners CEO, David Wright. He says inflationary pressures will continue to build as the global economy moves

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