Mr Viljanmaa brings TPT over thirty years of experience in the fixed income and mortgage space, most notably having worked for 20 years at Antares Capital, an arm of NAB Asset Management, as a highly regarded Fixed Income Portfolio Manager, with an exceptional track record during that time.

In this role, Mr Viljanmaa was responsible for the investment strategy and trading in liquid portfolio’s, along with primary market research and secondary market trading of RMBS securities, managing in excess of $30 billion in assets.

In his new Sydney-based role, Mr Viljanmaa will be responsible for all managed investment schemes within TPT and play an integral role in the expansion of TPT’s asset management business, as it looks to evolve its current investment funds suite by adding a range of income investment solutions for Australians striving for income in a low interest rate environment.

MyState Limited General Manager, Wealth Management, Craig Mowll says, “TPT has a rich 132-year history in building the wealth of Australians by protecting their assets and legacy through its specialist estate planning, asset management and advice business.”

“With over a 40-year performance track record in mortgage funds, TPT is now starting to evolve their managed investment schemes as well as investing in greater digital access for their investors.”

“Jukka’s has an enviable portfolio manager track record in the income space and we are proud to welcome him to our investment team at this significant yet exciting point in the business’ future.”

Mr Viljanmaa holds a Bachelor of Business, Finance from Charles Sturt University.

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Craig Mowll

Ironbark Asset Management announced yesterday that it has agreed to acquire Certitude Global Investments from its holding company, HFA Holdings Limited. The acquisition is expected to complete on 30 April 2015.

At completion, Ironbark will acquire 100% of the issued capital of Certitude from HFA. Certitude is the responsible entity of a number of registered managed investment schemes (the Certitude funds), and the management and operation of the Certitude funds will transition to the Ironbark Group on completion of the sale. The existing relationships with the investment managers of the Certitude funds will be maintained, which includes HFA subsidiary Lighthouse Partners, LLC (Lighthouse), Asian specialist manager GaveKal Capital Limited and USD500 billion global investment house Columbia Threadneedle Investments.

Ironbark is an independent provider of global asset management solutions. The acquisition is in line with Ironbark’s strategy to maximise its footprint in the Australian asset management market. Ironbark Chief Executive Officer, Chris Larsen, said the acquisition was a good strategic fit with its existing partnerships.

“The Certitude business provides a particular capability in global asset management that complements Ironbark’s existing offers and fund managers. We are delighted to be acquiring a business of such strength and capability, with strong customer relationships,” he said.

Craig Mowll, Certitude Chief Executive Officer, said: “We know this acquisition will deliver the scale opportunities to Certitude’s existing investment management suite which will ultimately benefit our clients. Certitude has a strong business model and this move ideally positions it to continue growing.”

As HFA Holdings Chairman, Michael Shepherd explained, the HFA Holdings board made the decision to sell the Certitude business after detailed consideration of its strategy and operations, after which a competitive bidding process was undertaken.

“This is a value creating transaction for our shareholders, Certitude’s partnered fund managers and of course investors. Ironbark has a great reputation in the industry and ability to effectively meet Certitude’s client needs. These were key considerations in HFA Holdings’ decision,” Mr Shepherd said.

Sean McGould, President and Co-Chief Investment Officer of Lighthouse, echoed Mr Shepherd’s response. “This transaction allows us to continue building scale and deepening our customer relationships in the Australian market where we have been present for 15 years. We’re pleased to be associated with such a well-regarded business as Ironbark,” Mr McGould said.

The transaction was advised and managed by Nelson Lam and Andrew Gale of Chase Corporate Advisory.

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Craig Mowll

Australian active investors continue to clamour for overseas investments, and high net worth investors[1] are leading the charge, according to the Certitude Global Investment Intentions Index (CGIII).

The CGIII, which collates the views of over 600 actively engaged investors and measures their demand for global investments, increased again this month to 186 (out of 200), on par with the all-time high last recorded in April 2014. Demand from high net worth investors (197) was even stronger in February, attaining its highest level since the inception of the CGIII in June 2013.

Annual capital gain expectations from global markets increased by 2% pts to 5% this month, but concern about the domestic economy deepened. Only about a fourth (28%) of investors believe that Australia’s economy will record healthy growth in the next 12 months, down from 32% last month, while nearly half (44%, steady) say they need more international assets in their investment portfolio.

Craig Mowll, CIO of Certitude Global Investment said: “What is really interesting is that the record demand for overseas assets this month coincides with the Australian dollar hitting a five year low against the greenback. This appears to be contradictory at first glance, because one would expect a weak Aussie dollar to constrain, rather than increase, investment in overseas markets.

“However, when investors were asked about the most appealing international markets, it became clear that they are taking the effect of exchange rate movements into account. Demand for US investments fell sharply among those who intend to invest overseas, from 53% to 45% this month, as did demand for assets in Western Europe, from 25% to only 18%. On the other hand, the attraction of investments in Asia rose significantly (from 13% to 18%), as the Aussie dollar performed better against the renminbi.

“Australian investors evidently want more international assets generally, but are considered in their decisions about the international markets they choose, incorporating expectations around exchange rates into research about which overseas markets offer the best value.”

When investors were quizzed about the asset class they favoured for their international exposure, equities were once again the clear favourite, and gained more ground this month. Ninety-one per cent of investors said they intend to invest (more) in equities, compared with 85% last month. Infrastructure was the next most popular option, at 11%, followed by property, at 10%.

Mr Mowll explained: “Equities have consistently been far and away the most popular option for Australian investors seeking overseas exposure, and this month was no exception. What was interesting was the fact that demand for the majority of other investment options fell across the board. It’s clear that more and more active investors are focused on international equities to the exclusion of other options, including infrastructure, property, fixed income and private equity, all of which went down.”

This month’s CGIII also revealed that exchange rates are very much top of mind for Australian investors. When they were asked about what currently stops them from investing (more) overseas, 26% cited exchange rate volatility as a barrier, up 4% pts from last month. Market volatility (21%, down 2% pts) continues to worry investors this month despite a slight decrease from the previous month.

Mr Mowll concluded: “Australian investors may be looking beyond their usual stamping grounds of the US and Western Europe on the back of a weaker exchange rate, but this clearly hasn’t seen them shun global markets altogether. In fact, what we may be seeing is a sharper focus on regions where they see better value, such as Asia. The US is still very much the preferred international market, but Asia is now on par with Western Europe, and fewer investors cited a slowdown in China as cause for concern this month compared with last month.

“The bottom line is that despite some concerns about specific markets and investment options, Australian investors have once again revealed themselves keener than ever to invest overseas, and bullish on the possibilities on offer in global markets.”

February CGIII – Key findings

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Craig Mowll

Nearly half (44%) of all investors believe they need more international assets in their investment portfolio, according to the Certitude Global Investment Intentions Index (CGIII). The CGIII, which collates the views of over 560 Australian actively engaged investors and measures their net demand for global investments, increased by 3% to a 9 month high this month, and is now at its second highest level since inception in June 2013.

While investors’ 12-month capital gain expectations from global markets increased in January, only 32% of investors said they believe Australia’s economy will record healthy growth in the next 12 months, indicating that nearly 70% of investors do not expect healthy growth.

Craig Mowll, CEO of Certitude Global Investment said: “It is not surprising to see demand for overseas assets at its second highest level since inception of the CGIII. Clearly investors remain fundamentally concerned about the strength of the Australian economy and are looking to cast their net further afield.

“And it seems that the RBA agrees. The recent decision to cut official interest rates would appear to indicate that investors aren’t the only ones concerned about the strength of our economy.”

When it came to international markets of most interest, the US/North America again remained far and away the most popular. Over half (53%, up 7% pts from December 2014) of investors interested in investing overseas chose this option. The second most popular option was international funds covering multiple regions (38%, up 6% pts), but Western Europe (25%, up 8% pts) also rose sharply month-on-month.

It was also revealed that investors are looking to act sooner rather than later. Intended timing of overseas investments remained short with 46% (down from 52%) of those interested in investing overseas saying they would like to do so in the next three months.

Mr Mowll commented: “While interest in North America (53%) and Western Europe (25%) is at its highest level since inception in June 2013, demand for Asian (13%, up 1% pt) and emerging markets (10%, up 1% pt) rose only very slightly. When these results are set against the backdrop of a rising greenback and slowing growth in emerging markets, it appears that investors may be looking to re-orient from riskier options, and focus on developed markets.

“Indeed, when they were asked what they were most concerned about in relation to their investments, 56% of investors said another global financial crisis, up 3% from last month. This suggests that while investors may be keen to invest overseas, they are cautious about the markets they choose.

“At the same time, it was clear from this month’s responses that investors are not ignoring the issues at home. A third of investors (32%) said that their biggest concern is Australia’s debt level, 30% were most concerned about commodity prices and 25% about the exchange rate and value of the Aussie dollar.”

In terms of investors’ preferred overseas asset classes, equities were once again at the top of the list, and this month demand increased by 4% pts to 85%, the highest level since November 2013. Demand for private equity (6%, up 3% pts) also increased, whereas demand for infrastructure (14%, down 2% pts) and hedge funds (2%, down 4% pts) fell.

Mr Mowll explained: “These results reveal that investors are feeling positive about international equity markets generally. And given that private equity is essentially unlisted equity, the increase in demand makes sense, as investors seek to increase and balance their exposure to equities with a mix of unlisted and listed assets.

“In addition, many investors consider investment in infrastructure and hedge funds as a means of mitigating risk, so at times when they expect an upward trajectory in equity markets, they are less likely to increase exposure to these assets. This may be the case now.”

January CGIII – Key findings

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Craig Mowll

According to the Certitude Global Investing Intentions Index (CGIII), net demand for overseas assets from Australian active investors reached an 8-month high in December 2014. The CGIII also reported a spike in demand for overseas assets among High Net Worth investors (HNW, $1m+ in investable assets) reaching its highest level since January 2014.

The December CGIII, which collated the views of over 600 actively engaged investors and measured their net demand for global investments, found that 44% of active investors believe they need more international assets in their investment portfolio (up 3% pts from November 2014). In fact, of those interested in investing overseas, 50% (up 9% pts from November) intended to do so within the next three months – the highest level recorded since the Index began.

Conversely, while interest in overseas assets was on the rise, confidence levels in the Australian economy fell a staggering 17% pts in December 2014, with only 26% of investors citing that they think the Australian market will record healthy growth in the next 12 months.

Craig Mowll, CEO of Certitude Global Investment said: “Results this month show that over half (53%) of investors are most concerned about the health of the local economy. With this confidence declining it’s unsurprising that there has been a significant increase in investors who are keen to seize the opportunities presented by international assets, and sooner rather than later.

“Against this backdrop, the net proportion of investors planning to invest in Australian shares decreased to its lowest level since the CGIII began. This downward trend continues with other asset classes, which are usually overweight, including investment property and term deposits. These movements are largely driven by concerns of the China slowdown, concerns around the resource sector and Australian debt.

“Elsewhere in the CGIII we are seeing an increase in the amount of investors interested in investing in overseas developed markets over the next 12 months. This demonstrates that although investors’ demand for offshore investments is increasing, they still are remaining cautious in their investment approach. Fifty-three per cent of investors said they were concerned about another global financial crisis or market crash, highlighting that people are conscious about where they spread their money geographically. This means developed markets tend to be an area of greater interest.”

Interestingly, while equities remain the preferred investment tool for gaining international exposure (81%), the CGIII recorded a substantial increase in the proportion of investors wanting to invest in infrastructure for their overseas exposure (16%, up 5% pts). Interest in hedge funds also increased in December, with 6% (up 2% pts) of investors wanting to invest in these structures for their overseas exposure.

Mr Mowll commented, “Interest levels in infrastructure and hedge funds could be a result of investors recognising that alternatives can be a good way of managing risk. Infrastructure tends to be a more solid asset class and can satisfy investors’ desire for income.”

Mr Mowll concluded by saying that December’s CGIII shows that investors are clearly losing confidence in the Australian economy as a result of domestic issues and this could be fuelling the demand for international investments. Nevertheless, while demand for overseas investment continues to increase, investors still remain cautious.

December CGIII – Key findings

• The CGIII went up slightly in December, from 172 in November to 178 in December. It also went up amongst HNW investors (from 186 in November to 193 in December) reaching its highest level since January 2014.
• More investors say they need more international assets in their investment portfolio (44%, up 3% pts) compared to November; 26% think the Australian market will record healthy growth in the next 12 months (down 17% pts).
• The net proportion of investors planning to invest in Australian shares decreased to 18% (down 10% pts). More investors want to gain international exposure via international shares (17%, up 4% pts).
• 18% of investors are interested in investing in developed markets over the next 12 months (up 10% pts).
• Half of those interested in investing overseas would like to do so within 3 months (50%, up 9% pts).

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Craig Mowll

Certitude Global Investing Intentions Index predicts a festive rush for overseas assets as the proportion of investors looking to increase their international exposure within the next month is at its highest level since the Index began.

Demand from Australian active investors for overseas assets increased in November to near on record highs and these investors are more likely than in previous months to be acting within the next 30 days according to the Certitude Global Investing Intentions Index (CGIII). The CGIII found that 20% of active investors are looking to increase their exposure before Christmas. For the month prior the corresponding figure was 13% and in September just 11% planned to invest within the next 30 days.

The CGIII, which collated the views of almost 800 actively engaged investors and measured their net demand for global investments found that overall, demand for overseas investments increased slightly from last month for all active investors. Among High Net Worth (HNW) investors the CGIII revealed that demand for overseas investments increased significantly to be on par with the 4 month high.

Craig Mowll, CEO of Certitude Global Investment said: “Results this month show that investors are increasingly decisive and many are seeing Christmas as a deadline for making overseas investments as they prepare to take a break over the traditionally quiet month of January.

“Elsewhere in the CGIII we are seeing High Net Worth investors continuing the momentum of previous months, increasing their exposure in markets they think are offering good investment opportunities at the right price.”

When investors were asked to specify the international markets that they are interested in investing more in over the next 12 months, the US/North America remained the most popular choice with 48% (up 2% pts) of global investors indicating they would invest in this region. This slight increase from October reflects ongoing investor confidence amidst promising economic data, including a 10^thconsecutive month of employment growth and news that the US economy is likely strong enough to withstand an increase in interest rates for the first time since 2006.

Interestingly, the CGIII recorded a substantial increase in investor interest in Asia (18% up 7% pts), suggesting that investors are using Asia to increase their exposure to emerging markets at the expense of a broader emerging market exposure which would include; Eastern Europe and South America.

Mr Mowll commented, “Over the last month we have seen some of the Asian markets rallying on the back of the strength of U.S. data and China’s benchmark index is leading the gains amongst these markets. Hong Kong’s benchmark Hang Seng Index is another to have made good gains. We would expect that the Asian equity markets are appealing to those investors wanting measured exposure to emerging economies.”

Equities remain the preferred investment tool for gaining international exposure with 81% (steady) stating it is their preferred asset class for increasing exposure over the next 12 months. Worthy of note, however, is the increasing interest in commodities and fixed income where 9% and 8% respectively were interested in investing more over the next 12 months, up from 7% and 5% respectively last month.

This month’s CGIII also recorded a rebound in actively managed international funds as investors were asked to specify how they intended to obtain the increased exposure to these asset classes (40%, up 6% pts).

Commenting on the reasons for the rise in demand for actively managed international funds, Mr Mowll said: “This month we are seeing more investors planning to increase their exposure via actively managed funds in preference to direct shares. With a substantial increase in demand for Asia we expect that many of these investors are looking to take advantage of the knowledge of specialist fund managers rather than making their investment choices alone in a market where they may not fully understand the dynamics.”

Finally, the CGIII found that the most common concern investors have in relation to their investments is the threat of another global financial crisis. This month 53% of investors sighted this as their biggest concern compared to 49% last month. Of note is that the other concerns to have increased over the last month relate to domestic issues. The number of investors stating that their biggest concern was the state of the Australian economy increased from 36% to 41%. The proportion of investors reporting concerns about Australian debt levels increased from 24% to 25% and the corresponding figure for property prices was an increase from 19% to 25%.

Mr Mowll concluded by saying that this month’s CGIII shows that domestic issues are weighing on the minds of investors and this may be playing a part in increasing demand for overseas investment.

“At the moment we are seeing a lot of commentary around domestic issues and a possible recession, so by comparison the news from other markets appears more optimistic. With the festive season marking a traditional slowdown in investment activity it seems likely that some investors are diverting funds abroad in the short term at least as international markets, in particular Asia, appear to offer good opportunities,” he said.

It is also clear that many investors who are keen to invest offshore are aware of the benefits of managed funds, particularly those covering a region where they may not have investment expertise.”

November CGIII – Other key findings

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Craig Mowll

High levels of volatility in global markets have again driven opposing behaviours between Australian active investors and high net worth investors in regards to demand for overseas assets. This was a key finding of the October Certitude Global Investing Intentional Index (CGIII).

The CGIII, which collates the views of 515 actively engaged leading investors and measures their net demand for global investments, decreased by 5% in October, and is now at its lowest level since February 2014.

Against a backdrop of market volatility not experienced since 2008, active investors’ concern levels increased to 6.1 out of 10 in October, the highest level since August 2013. On the other hand, demand from high net worth investors for overseas assets increased, as they identified significant buying opportunities on the back of weak pricing data.

Craig Mowll, CEO of Certitude Global Investments said: “Results this month showed that volatile market conditions have created uncertainty and some degree of caution in the minds of many active investors. But what was also noticeable was the fact that high net worth investors were clearly unconcerned about long term fundamentals, and instead seized the opportunity of increasing their exposure while prices were momentarily depressed.

“Equities remained by far the most popular choice of international asset, with 81% of investors interested in gaining exposure to global markets via shares. This was 4% pts fewer than last month, no doubt a response to volatility in international markets. In fact, when investors were asked what was currently stopping them from investing more in overseas markets, 25% cited market volatility, up from only 17% in September.

“What is worth noting however, is that at the same time that demand for equities dropped, demand for alternative asset classes, such as private equity funds, hedge funds, infrastructure and commodities all increased. This was clearly a case of investors looking to mitigate portfolio risk by choosing assets classes with low correlation to equity markets.”

When asked about the intended timing of their next overseas investment, 37% of investors said they would invest in the next three months, the same proportion as last month. This is a clear indication that despite the recent volatility, investors are not shunning international markets and still see potential for returns looking forward.

Commenting on this month’s results, Mr Mowll said: “There is no question that investors are feeling more concerned than usual about global markets and that this anxiety has translated itself into very volatile market conditions around the world.

“At the same time, astute investors have taken steps to mitigate risk through the use of alternative asset classes, like hedge funds, in order to smooth returns. And high net worth investors have their eyes firmly on the end game. They remain committed to maintaining exposure to international markets while using short term price weakness to their advantage, increasing exposure to assets with good long term potential.”

October CGIII – Key findings:

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Craig Mowll

The loss of momentum in Europe and the absence of any new potential driver to push European equity markets to new highs will see retail investors increasingly turn to Asia over the next 12 months according to Louis Vincent Gave, COO and Chief Risk officer of GaveKal Capital, on the eve of his Australian visit.

With little to keep retail investors and the marginal investment dollar in Europe, Asia looks well positioned to capitalise on Europe’s loss, particularly with the MSCI Asia index now outperforming the MSCI World for the first time since the first quarter of 2010. Adding to this woe Eurozone equities are now underperforming cash, gold, local bonds, international bonds and international equities.

Mr Gave commented, “Unfortunately for Europe, the marginal investment dollar is more often than not highly momentum-driven and chases performance. That’s because it is usually provided by the retail investor, and retail investors have a long track record of being momentum jockeys.”

This also mirrors the attitudes of investors in Australia according to GaveKal’s Australian partner, Certitude Global Investments. CEO Craig Mowll commented, “Our monthly investment Index, the CGIII, surveys the attitudes of Australian investors and our last report echoes this sentiment. In fact Asia was one of the few regions to stand its ground when investors were asked which international markets they were most keen to invest in over the next 12 months. Most other major markets saw a decline in investor appetite.”

But both GaveKal and Certitude have cautioned investors that not all boats will rise with the tide and country divergence is ever more important. There are widespread differences between the emerging markets within Asia, they agreed.

Mr Gave expanded, “Between 2003 and 2010 there was a high correlation between Asian equity markets driven by the emergence of China as an economic powerhouse, the quintupling of energy prices and the GFC and recovery, but since then the correlation has loosened tremendously. China, Hong Kong and South Korea have been underperformers as growth in China has decelerated. Meanwhile political developments in India, the Philippines and Indonesia have been drivers of the markets.”

The recent CGIII lends further support to this. Mr Mowll added, “We saw in the August CGIII that within Asia the attitudes to each country vary enormously. We saw appetite for Asia increased on the whole, however on an individual basis, interest in China was down slightly while India and Japan were on the increase. The balance of payment surplus and good inflation levels in the Philippines will also make this a stand out for investors.

“Asia is not a homogenous group and investors will increasingly look for managers that act on this and factor this into their portfolio construction.”

One of the key themes of Mr Gave’s Australian visit will be stock selection and he is expected to suggest that the days of casting a wide net are also over, with individual stock selection more important in light of the tremendous divergence within markets. Mr Gave explained, “There is a focus now to concentrate the portfolio on strong conviction ideas to add more value. If we look at Chinese internet stocks versus SOEs or Japanese banks versus exporters these are clear cases in point.

Mr Mowll concluded by saying that investors are increasingly seeking the expertise to give them the confidence to invest in Asia.

He concluded, “Australian investors are informed enough to know that Asia is not one homogenous emerging market but they may not have the time to understand the impact of demographic profiles, political and economic developments on the performance of individual markets. This is why they turn to an investment manager that is nimble enough change the portfolio quickly as the region evolves.”

Louis Vincent Gave will be visiting Australia as a guest of Certitude next week.

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Craig Mowll

Certitude Global Investing Intentions Index Report shows overall investor confidence has fallen across domestic and international markets amongst most asset classes but high net worth (HNW) and advised investors are bucking this trend.

While overall demand by Australian investors for most investments has slowed, HNW investors are showing little of the same nervousness of the broader investment community, according to the August Certitude Global Investing Intentions Index (CGIII).

The CGIII, which collates the views of over 600 actively engaged leading investors and measures their net demand for global investments, recorded a slight month-on-month decline of 2% in net demand for international investments in addition to a sharp fall in confidence around Australian equities.

The CGIII also compared high net worth investors (HNWs, $1m+ in investable assets) to the broader investor community and reported a marked difference in attitudes and confidence levels. Among the broader investor sample the overall net demand for global investments fell 2%, however amongst the HNW investor group the overall net demand for global investments continued to climb – settling at a level roughly equal to the six month high.

Commenting on the findings, Craig Mowll, CEO of Certitude Global Investments pointed to the role of advice in helping investors to protect themselves from panic, enabling them make measured and considered investment decisions. “We know that HNW investors are significantly more likely to be taking expert advice, for example they are likely to be considering international managed funds covering multiple regions in their portfolio. And further, when we look at the split between advised versus non-advised investors, the disparity in levels of confidence is even more marked. Advised investors have maintained the same levels of net demand for global investment over the last four months while non-advised investors have become very nervous.”

Although overall demand fell for both Australian and International shares, the popularity of these investments continued to outstrip other asset classes, such as property, term deposits and exchange traded funds. And looking specifically at the levels of interest in international investments over the next 12 months, the CGIII reported most global asset classes to have declined or to have remained steady, with the notable exception of fixed income (10%, up 4% pts). Appetite for this more defensive investment option increased to a 12-month high as it continued its surge in popularity for investors seeking out safer investment options.

Mr Mowll expanded, “Results from the CGIII in August suggest that investors are cautious about most equity markets and the slight decline in appetite for international investments is symptomatic of this nervousness. While high net worth investors buck this trend, the average investor is turning to lower risk asset classes such as global fixed income to maintain exposure outside Australia in what is considered a safer investment product.”

Mr Mowll continued, “For the first time the CGIII asked investors about specific concerns and the responses give further light and shade on this lack of confidence. The greatest concern for investors was the fear of another GFC or market crash, a factor cited by almost half (49%) of investors while the top ten concerns featured a mix of global and domestic factors. Geo-political events such as turbulence in the Middle East (41%) in addition to the slowdown in China (38%) weighed on the minds of investors. Of equal concern were factors closer to home such as a lack of confidence in the Australian economy (34%) and high levels of national debt (25%), and this has contributed to general dampening of investor confidence across the board amongst the unadvised investor community.”

Interest in multiple region managed funds continued to make gains

When investors were asked, specifically, which international markets were of most interest over the next 12 months, the US/North America (42%) again came in as the clear favourite among those planning to invest overseas, even though the level of interest was down significantly (by 9% pts).

The other winner was international funds covering multiple regions (31%). This option was once again investors’ second choice after the US/North America, with demand up 4% pts month-on-month.

Lending further support to the argument for expert advice in turbulent times, the intention to gain international exposure via actively managed funds increased by 6% pts to 39% overtaking ‘direct purchase of overseas shares’ (37%) which fell by 4% pts.

Overseas investment timeframes shorten, particularly amongst HNW Investors

The CGIII also saw the intended timings for overseas investments shorten considerably. Among those investors planning to invest overseas, 43% plan to do so within the next three months, an increase of 5% pts and a seven month high. Looking again at HNW investors, the timeframes are shorter still with 55% planning to invest offshore over the next three months.

Commenting on the increase in demand for managed funds investments overseas, Mr Mowll said, “In addition to higher levels of confidence among those who are seeking expert advice, we can also see that this group is more decisive. Again this shows that advisers are in the box seat to help their clients navigate the myriad of factors that may or may not impact investment outcomes and provide guidance over specific timeframes. The benefit of expert advice is not exclusively for HNW investors, rather an adviser can provide all investors with access to experienced investment managers, capable of structuring a portfolio across multiple regions to achieve the best investment outcomes for clients.

Mr Mowll concluded: “Although we are seeing an overall slowdown in demand for Australian and international shares, we continue to see desire for an asset allocation less heavily skewed to Australian equities with advised and high net worth investors leading the charge. The increasing popularity of managed funds demonstrates this and we would expect to see this trend continue, particularly if advisers play a more prominent role in helping navigate clients through uncertain times.”

August CGIII – Other key Findings

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Craig Mowll

Demand from Australian investors for international shares increased markedly in July, according to the Certitude Global Investing Intentions Index (CGIII). The CGIII, which collates the views of over 630 actively engaged leading investors and measures their net demand for global investments, revealed that 22% of investors plan to increase their exposure to international shares, up from 16% the month prior.

In fact, investors showed certain eagerness to increase their overseas investment sooner rather than later with 38% of investors saying they plan to increase exposure within three months, up from 30% saying so in June. And 4% said they would do it in the next week (up from 1%).

Investors’ concern levels with global markets fell further this month, reaching the lowest point observed since the GFC of 5.4 out of ten, as optimism about global and domestic markets soared. Three out of four Australian investors now believe global markets will rise over the next year, up from 67% in June, and only 11% believe they will fall, down from 13% over the same period.

Investors’ expectation of returns from domestic markets are higher this month as well. On average, Australian investors expect the All Ordinaries to rise by 6% in the next 12 months, compared with an expectation of 5% in the June study.

Craig Mowll, CEO of Certitude Global Investment said: “Results this month indicate that there is real optimism about investing in general. Despite some concerns about China and recent events in the Middle East and Ukraine, investors appear undaunted about any negative effect on offshore markets. This may be one reason that demand for international funds covering multiple regions decreased slightly this month when compared with other geographic options, as increased confidence can lead investors to want to overweight to particular regions themselves.”

The US/North America remained far and away the preferred option when it came to international markets. Its popularity has been rising sharply since May this year. This is likely the result of better economic data coming out of the US, and the fact that US corporate profits and earnings are strong.

Also of note, interest in investing in Western Europe reached a 12 month peak, which again reinforced the view that investors are positive about the pace of recovery in the Eurozone despite the issues in the Ukraine.

When investors were asked about which international asset classes they favoured, equities remained by far the most popular. What was interesting however, is that interest in infrastructure investments increased sharply (13%, up from 9% in June), as did interest in hedge funds (6%, up from 3%).

When it came to the barriers stopping or limiting investors from investing more in overseas markets, a lack of knowledge was again the biggest barrier. However, and perhaps reflecting investors’ optimism, it was down by 2% pts, from 25% in June to 23% in July. Concerns about market volatility were also up by a small amount, which may account in part for the increased demand for infrastructure and hedge funds, which are designed to help manage volatility.

Commenting on the reasons for significant uptick in interest in infrastructure and hedge funds, Mr Mowll said: “Over the past 6 months, Certitude has experienced a marked increase in investor appetite for alternatives, with a particular interest rising for hedge funds. One reason may be that investors are also dialling up their exposure to equities, and understand that alternatives are a great way of cushioning volatility and managing risk. Hedge funds have little correlation with equity and fixed income markets, and in the case of infrastructure, it can satisfy investors’ desire for income.”

Mr Mowll concluded by saying that this month’s CGIII shows that Australian investors clearly have a growing appetite for international exposure, and that even political turbulence in global hotspots has not affected their optimistic outlook.

“Nonetheless, it was interesting to see that a lack of knowledge was still the most commonly cited barrier to investing overseas and that actively managed international funds remained a strong preference for investors looking to make informed decisions.

It is great to see investors acknowledging that they need to look further afield than our domestic equity markets for returns, and that there are number of investment options in addition to equities, when it comes to structuring a balanced portfolio of global assets.”

July CGIII – Key findings

1. Investors’ concern level with global markets reached a record low of 5.4 out of ten, down from 5.6 last month.
2. 22% of investors plan to increase their exposure to international shares, up 8% pts, compared with June.
3. Australian investors are more optimistic in their outlook than in June. They anticipate a rise of 6% in the All Ordinaries over the next 12 months, and 5% for global markets.
4. The most popular overseas markets were the US/North America (51%), followed by international funds covering multiple regions (27%) and Western Europe (26%).
5. 41% would like to gain exposure via direct shares (up 3% pts); 33% would like to gain exposure via ETFs (up 6% pts) and 33% prefer actively managed funds (down 3% pts).

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