Darren Connolly

With geopolitical conflict driving energy prices higher, bond yields rising, tariff uncertainty persisting and artificial intelligence reshaping entire sectors, Australian investors are navigating one of the most complex environments in recent memory.

InvestmentMarkets has brought together views from 10 leading fund managers, market strategists and sector specialists across equities, fixed income, property, private credit and global macro to cut through the noise – each offering a distinct perspective on where the risks and opportunities sit heading into the second half of 2026.

Rather than a single house view, this collection captures the diversity of approaches investors are weighing – from global macro positioning and contrarian equity strategies through to unlisted property, mortgage funds and the new yield alternatives emerging on the ASX – highlighting why discipline and diversification matter more than ever.

Darren Connolly, CEO, InvestmentMarkets: “Most investors think they’re diversified, but true diversification means more than holding a few different stocks. It means exposure across asset classes, geographies and income sources – and it means having parts of your portfolio where the cash flows aren’t driven by market sentiment at all. That’s the gap we see most often, and it’s the one that hurts most in periods like this.”

Michael McCarthy, CEO, Moomoo ANZ: “I’m seeing signals from bond markets, currency markets, cryptocurrency markets, and share markets that are all lining up with the same message – growth is slowing and interest rates are headed higher. The best time to prepare for volatility is at the beginning when you devise your strategy. The next best time is when markets are going well. The third best time is now, because it’s never too late to act.”

Rudi Filapek-Vandyck, Founder, FNArena:“The share market outside of a very small selection of winners is now basically becoming a value proposition for investors who can look beyond the immediate headwinds. The whole AI narrative is a very long-term story. It’s going to change the world, have no doubt but the way it does is open for debate.”

Simon Raubenheimer, Director, Contrarius Investment Management: “It is tempting to get excited about shares that are down 70 to 80 per cent in a short space of time, but there’s a serious risk of buying a value trap. Our challenge is to be extremely disciplined in avoiding companies that face existential risks, even if they look cheap in the rearview mirror.”

Marc Jocum, Product and Investment Strategist, Global X:“The current dividend yield on the Australian share market is around 3.2 per cent, the lowest it’s been for decades. We are heavily weighted into financials and materials, which make up 50 to 60 per cent of the market, and significantly underexposed to the sectors projected to grow earnings at double digits. Don’t forget that earnings drive the majority of share market returns.”

Michael Saba, Portfolio Manager, Arculus Funds Management:  “The landscape has changed dramatically. Hybrids are being phased out, but that doesn’t mean they’re dead, there are still 38 issues and around $37 billion outstanding. What’s exciting is the range of new yield products emerging. It’s a sector that has just reached adolescence – it’s going through growing pains, and that’s good, because it will sort itself out.”

Nick Alcock, Australian Secure Capital Fund (ASCF): “Since October 2021, APRA has maintained a 3 per cent mortgage serviceability buffer. The unintended consequence is that we now see situations where hopeful refinancers can’t even service with their current lenders. Borrowers still need funding and projects still need finance, but the traditional banking system is no longer willing to provide it in some cases and that’s the gap private lenders have stepped in to fill.”

Vaughan Hayne, Managing Director and Co-Founder, Exceed Capital: “We’ve seen rents on the Gold Coast increase 40 per cent in two years, with A-grade office vacancy under 1.7 per cent, the lowest it’s ever been. Some of our A-grade buildings have moved from $460 to $650 per square metre. Construction costs and labour costs are at record highs, which means less new supply – which is generally a good thing for existing commercial property owners. Less supply, more demand, pushes up rental prices.”

Michael Fazzini, Sales and Distribution Executive, Capru: “The biggest insight in property development that most investors don’t realise is that most of the profit comes from what you pay for the land. Market price for land in our world isn’t the last transaction of a similar site or per square metre, it’s working backwards from what the finished product is worth, the build costs, and the minimum return needed to make the project viable. Get that wrong and no amount of execution can save you.”

Marcus Cleary, Head of Distribution, Oreana: “Volatility is a pricing problem, not a cash flow problem. Whether it’s tariffs, tech selloffs or oil shocks, the price volatility and breadth of that volatility isn’t seen within the direct asset class because the cash flows we deliver are linked to CPI and backed by long-term leases. Regardless of the economic environment, families are still sending their kids to childcare.”

Richard Collier, CFO, Heartland Bank: “Australians aged over 60 hold more than $3 trillion in property, yet less than 1 per cent of that available equity has been unlocked. The total reverse mortgage market is only around $5.5 billion against an addressable market of around $600 billion. With superannuation balances of just over $4 trillion across the entire system not sufficient to fund the lifestyle Australians expect in retirement, this is the largest store of value that remains untapped.”

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In its research report published 11 March 2026, Lonsec commented that “Stephen Mildenhall provides strong leadership to a well-resourced team, reflective of the firm’s boutique culture to deliver performance. The collaborative investment process aims to identify undervalued stocks through proprietary research focusing on the team’s best ideas. The process is differentiated, talent-led, and the Manager’s portfolio construction approach can result in a concentrated style with very different outcomes vs the benchmark.”

The Fund continues to distinguish itself from other global equity offerings through its high-conviction, benchmark-unaware approach. Lonsec noted that “the Fund’s annualised net returns of 26.7% over five years is well above the peer median of 14.0% p.a.” Lonsec further noted that “the Fund’s outperformance for the year was primarily driven by strong stock selection in key ‘top 10’ holdings.”

Commenting on the ratings announcement, Simon Raubenheimer, director of Contrarius Investment Management Limited, noted that “Contrarius is honoured to have Lonsec reaffirm their ‘Recommended’ rating for the Contrarius Global Equity Fund, which is a testament to the consistency of our investment process. In an era often dominated by passive investing, momentum and short-term sentiment, we remain steadfast in our contrarian and valuation-based approach. We believe that the greatest risk to investors is the permanent loss of capital from overpaying for assets, and our focus remains on identifying the gap between a company’s price and its true intrinsic value.”

Chris Watson, director of Contrarius Investment Advisory (Pty) Limited, the Fund’s distributor in Australia, added that “the Lonsec rating provides financial advisors with an important and independent basis for evaluating the Fund’s investment merits”. He noted that “the Fund’s portfolio is intentionally benchmark-unaware, allowing the flexibility to take advantage of opportunities where the team identifies the most compelling risk-reward profiles”. He concluded that “the Fund’s contrarian approach provides a differentiated offering for Australian investors seeking global equity exposure”.

The Fund is available for investment directly online or through leading investment platforms, including Netwealth. More information regarding the Contrarius Funds is available on Contrarius’ website (www.contrarius.com.au). Interested parties may contact Contrarius directly to request a copy of the Lonsec research report or to arrange a meeting to discuss the Fund’s strategy and current positioning.

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Notes:
[1] Annualised net returns to 31 December 2025. Lonsec Peer Group: Global Equities – Global Large Cap – Value
[2] The report that included this extract and rating was published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec) on 11 March 2026. Lonsec receives a fee from fund managers for the preparation of reports. Lonsec’s reports are prepared based on a Research Process that is consistently followed for different products. The information included in the report, including the rating, is general advice only. An investor should be aware that: a) the advice has been prepared without taking into account; b) an investor should consider the appropriateness of the advice having regard to their own objectives, financial situation or needs before acting on the advice; and c) an investor should obtain a Product Disclosure Statement (PDS) (if required) relating to the product, consider the PDS and seek independent financial advice before making any decision about whether to acquire the product. The report, including the rating, is not a recommendation to purchase, sell or hold any product. Past performance is not a reliable indicator of future performance. Reports are prepared based on information available at the time of preparation and may be subject to change by Lonsec without notice. Visit lonsec.com.au for important documents including the Financial Services Guide and Conflicts of Interests Statement.  © 2026 Lonsec. All rights reserved.

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The Fund, which launched in 2018, aims to achieve long-term returns that are higher than the benchmark MSCI World Index, including net income reinvested, without the greater risk of loss, over the long-term.

The Fund offers investors a high-conviction portfolio of selected global companies with a long-term investment horizon. Contrarius’ investment philosophy can best be described as fundamental, valuation-based and contrarian. As a result of the manager’s philosophy, the Fund’s holdings are typically expected to differ markedly from those of its benchmark and of other global equity funds.

Lonsec noted in its research report, that the investment manager’s “investment process is pragmatic and has been well-established for more than a decade, with strong links between analyst stock research and portfolio construction”, and that Stephen Mildenhall, founder of Contrarius, “provides strong leadership to investment the team”. Lonsec further noted that the Fund’s investment team “have significant global equities experience across multiple market cycles”.

Simon Raubenheimer, director of Contrarius Investment Management Limited, the investment manager, commented that “Contrarius is pleased to have received a ‘Recommended’ rating from Lonsec for the Contrarius Global Equity Fund. This recognition by Lonsec provides us with a great opportunity to offer our long-established global equity strategy to retail, wholesale and advised investors in Australia.”

Owen Crombie, from Contrarius Investment Advisory (Pty) Limited, the Fund’s distributor in Australia, added that “this is an important milestone for the Fund and for Contrarius in Australia. We are proud to have received this rating which underscores the strength of our investment process and focus on delivering long-term results for our investors. We look forward to discussing with financial advisers our unique contrarian investment approach and how the Contrarius Funds may benefit their clients’ portfolios”.

The Fund is available on Netwealth and Mason Stevens.

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