AdviserVoiceTracey McNaughton Archives - AdviserVoice https://www.adviservoice.com.au/tag/tracey-mcnaughton/ Financial planner information & financial planner education/CPD - AdviserVoice Fri, 04 Sep 2026 20:55:42 +0000 en-US hourly 1 https://wordpress.org/?v=7.1 Australia’s biggest challenge isn’t inflation, it’s productivity https://www.adviservoice.com.au/2026/07/australias-biggest-challenge-isnt-inflation-its-productivity/ https://www.adviservoice.com.au/2026/07/australias-biggest-challenge-isnt-inflation-its-productivity/#respond Tue, 21 Jul 2026 20:50:53 +0000 https://www.adviservoice.com.au/?p=112730

Tracey McNaughton

AI is expensive, but not necessarily a bubble

When we think about bubbles, we tend to think about periods like the dot-com boom or Japanese equities in the late 1980s, where prices became completely detached from economic reality. At the peak the Nikkei was trading at 60 times earnings. That’s not where we are today. The US equity market is trading on 25 times earnings.

This is a technology revolution that spills over into many industries. It has many layers to it. What is good about it is the centre of gravity keeps shifting.

Two years ago the market was almost entirely focused on the AI model builders and the hyperscalers. Then it moved to semiconductors. More recently we’ve seen leadership broaden into memory, networking, power infrastructure, electrical equipment, data centres and even utilities.

As each part of the AI value chain becomes fully valued, the market has tended to rotate towards the next bottleneck rather than simply pushing the same group of stocks ever higher. In that sense, it’s almost been self-correcting. Leadership broadens rather than simply becoming more expensive.

Consider what happened to tech stocks in the second quarter. Relatively unknown memory stocks like SK Hynix in Korea surged over 200% in the quarter while Microsoft rose just 1% in the quarter. This rotation is keeping valuations in check. The forward price-to-earnings multiple for Microsoft is around 25 times. Even Nvidia, the poster child for AI, is trading on 23 times earnings. That’s certainly not cheap, but it’s also a long way from the valuation excesses we saw during the dot-com era.

So, I don’t think we’re in a classic valuation bubble. I think we’re in a market with very high expectations – and that’s a different risk altogether.

Does this reflect a market maturity issue?

Growth is no longer the binding constraint. Inflation is, and because inflation determines what central banks do, it increasingly determines what value investors place on future earnings.

The higher interest rates are, the less value is placed on future earnings. So even though we are likely to see some pretty extraordinary earnings from may US companies this reporting season, we may see a more muted response to them by the market.

How it’s shaping the battle for capital

The Prime Minister made an important observation when he said Australia shouldn’t simply become a data warehouse for somebody else’s AI.

It’s not enough to attract investment. The investment also needs to leave Australia better off. That’s why the Government is proposing that large AI data centres contribute to the electricity system they rely on, create lasting employment opportunities and ensure Australian copyright holders share in the value created by AI.

Conceptually, I think that’s exactly the right objective. It is aligning who pays, who benefits and who bears the costs. But there is a balancing act. Every additional requirement also changes the economics of investing in Australia. Private capital is incredibly mobile.

Ultimately, that capital will flow towards the jurisdictions offering the best return for the risk. So, I think the challenge for governments is becoming increasingly clear. How do you make sure Australians share in the benefits of AI without making Australia a less attractive place to invest?

Super as a national asset to fund Australia’s future

Superannuation doesn’t belong to governments. It belongs to members. Trustees have one overriding obligation – to invest in the best interests of those members. I don’t think those two positions are incompatible. In fact, the ideal outcome is where they’re perfectly aligned.

If investing in Australian infrastructure, energy, AI or housing delivers the best long-term risk-adjusted returns for members, then everybody wins. Members receive better retirement outcomes. Australia builds the infrastructure it needs. Governments achieve their policy objectives. That’s alignment.

The challenge is making sure governments create investment opportunities attractive enough that super funds choose Australia because the economics stack up – not because they’re asked to.

The influence of taxation

One of the things economists often say is that every tax system creates incentives. And whenever incentives change, capital follows.

For almost thirty years, Australia’s tax system has strongly rewarded capital growth, shaping behaviour across investment property, shares, venture capital and private equity. The Budget changes that equation.

I don’t think growth investing suddenly becomes unattractive – great businesses will always create wealth. But I do think the relative attractiveness of different types of investments changes. Superannuation becomes relatively more attractive for example.

The question around housing

If the after-tax return becomes less attractive, some investors may simply decide not to buy the next property. Who replaces them? Owner-occupiers don’t necessarily value investment properties in the same way investors do.

It’s the marginal buyer who ultimately determines price. Prices may need to adjust down until a new marginal buyer emerges – until the market clears. So prices fall.

What does this mean for productivity?

If Australia wants more investment in housing, AI, infrastructure and innovative businesses, then our policy settings need to encourage that investment.

Ultimately, productivity isn’t just determined by technology, It’s determined by where a nation’s savings are invested. Perhaps that’s the question we should ask of every major policy reform:

Does it encourage more productive investment into Australia… or less? Because in the end, that’s what will determine not just the returns investors earn, but the kind of economy Australia builds over the next decade.

If Australia can get productivity working for it and create the right incentives for private capital to invest in productivity-enhancing projects, then perhaps the narrative shifts again.

Instead of asking whether inflation will keep interest rates higher for longer, investors can start asking where the next phase of sustainable growth will come from.

By Tracey McNaughton, CIO

]]>

Tracey McNaughton

AI is expensive, but not necessarily a bubble

When we think about bubbles, we tend to think about periods like the dot-com boom or Japanese equities in the late 1980s, where prices became completely detached from economic reality. At the peak the Nikkei was trading at 60 times earnings. That’s not where we are today. The US equity market is trading on 25 times earnings.

This is a technology revolution that spills over into many industries. It has many layers to it. What is good about it is the centre of gravity keeps shifting.

Two years ago the market was almost entirely focused on the AI model builders and the hyperscalers. Then it moved to semiconductors. More recently we’ve seen leadership broaden into memory, networking, power infrastructure, electrical equipment, data centres and even utilities.

As each part of the AI value chain becomes fully valued, the market has tended to rotate towards the next bottleneck rather than simply pushing the same group of stocks ever higher. In that sense, it’s almost been self-correcting. Leadership broadens rather than simply becoming more expensive.

Consider what happened to tech stocks in the second quarter. Relatively unknown memory stocks like SK Hynix in Korea surged over 200% in the quarter while Microsoft rose just 1% in the quarter. This rotation is keeping valuations in check. The forward price-to-earnings multiple for Microsoft is around 25 times. Even Nvidia, the poster child for AI, is trading on 23 times earnings. That’s certainly not cheap, but it’s also a long way from the valuation excesses we saw during the dot-com era.

So, I don’t think we’re in a classic valuation bubble. I think we’re in a market with very high expectations – and that’s a different risk altogether.

Does this reflect a market maturity issue?

Growth is no longer the binding constraint. Inflation is, and because inflation determines what central banks do, it increasingly determines what value investors place on future earnings.

The higher interest rates are, the less value is placed on future earnings. So even though we are likely to see some pretty extraordinary earnings from may US companies this reporting season, we may see a more muted response to them by the market.

How it’s shaping the battle for capital

The Prime Minister made an important observation when he said Australia shouldn’t simply become a data warehouse for somebody else’s AI.

It’s not enough to attract investment. The investment also needs to leave Australia better off. That’s why the Government is proposing that large AI data centres contribute to the electricity system they rely on, create lasting employment opportunities and ensure Australian copyright holders share in the value created by AI.

Conceptually, I think that’s exactly the right objective. It is aligning who pays, who benefits and who bears the costs. But there is a balancing act. Every additional requirement also changes the economics of investing in Australia. Private capital is incredibly mobile.

Ultimately, that capital will flow towards the jurisdictions offering the best return for the risk. So, I think the challenge for governments is becoming increasingly clear. How do you make sure Australians share in the benefits of AI without making Australia a less attractive place to invest?

Super as a national asset to fund Australia’s future

Superannuation doesn’t belong to governments. It belongs to members. Trustees have one overriding obligation – to invest in the best interests of those members. I don’t think those two positions are incompatible. In fact, the ideal outcome is where they’re perfectly aligned.

If investing in Australian infrastructure, energy, AI or housing delivers the best long-term risk-adjusted returns for members, then everybody wins. Members receive better retirement outcomes. Australia builds the infrastructure it needs. Governments achieve their policy objectives. That’s alignment.

The challenge is making sure governments create investment opportunities attractive enough that super funds choose Australia because the economics stack up – not because they’re asked to.

The influence of taxation

One of the things economists often say is that every tax system creates incentives. And whenever incentives change, capital follows.

For almost thirty years, Australia’s tax system has strongly rewarded capital growth, shaping behaviour across investment property, shares, venture capital and private equity. The Budget changes that equation.

I don’t think growth investing suddenly becomes unattractive – great businesses will always create wealth. But I do think the relative attractiveness of different types of investments changes. Superannuation becomes relatively more attractive for example.

The question around housing

If the after-tax return becomes less attractive, some investors may simply decide not to buy the next property. Who replaces them? Owner-occupiers don’t necessarily value investment properties in the same way investors do.

It’s the marginal buyer who ultimately determines price. Prices may need to adjust down until a new marginal buyer emerges – until the market clears. So prices fall.

What does this mean for productivity?

If Australia wants more investment in housing, AI, infrastructure and innovative businesses, then our policy settings need to encourage that investment.

Ultimately, productivity isn’t just determined by technology, It’s determined by where a nation’s savings are invested. Perhaps that’s the question we should ask of every major policy reform:

Does it encourage more productive investment into Australia… or less? Because in the end, that’s what will determine not just the returns investors earn, but the kind of economy Australia builds over the next decade.

If Australia can get productivity working for it and create the right incentives for private capital to invest in productivity-enhancing projects, then perhaps the narrative shifts again.

Instead of asking whether inflation will keep interest rates higher for longer, investors can start asking where the next phase of sustainable growth will come from.

By Tracey McNaughton, CIO

The post Australia’s biggest challenge isn’t inflation, it’s productivity appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2026/07/australias-biggest-challenge-isnt-inflation-its-productivity/feed/ 0 Escala says country-level insight is becoming critical to sophisticated global portfolios https://www.adviservoice.com.au/2026/05/escala-says-country-level-insight-is-becoming-critical-to-sophisticated-global-portfolios/ https://www.adviservoice.com.au/2026/05/escala-says-country-level-insight-is-becoming-critical-to-sophisticated-global-portfolios/#respond Mon, 18 May 2026 21:10:18 +0000 https://www.adviservoice.com.au/?p=111397

Ben James

Escala, an Australian private wealth investment and advisory firm, working with high-net-worth individuals and families, family offices and not-for-profit organisations, says investors need to place greater emphasis on understanding the country-level drivers shaping global markets, as differences between economies play a larger role in outcomes.

The firm works with clients who have complex financial needs, and where their investment decisions extend beyond markets to structure, timing and long-term objectives.

Escala says that while broad regional exposures such as ‘Europe’ and ‘emerging markets’ remain a useful foundation, they are increasingly being complemented by a more granular view of the underlying exposures within those regions.

Ben James, Chief Executive Officer at Escala, said the shift reflects how portfolios are being constructed rather than a change in overall direction.

“For most clients, this is not about moving away from global exposures,” Mr James said. “It is about understanding them more clearly and understanding where capital is actually deployed, what is driving returns, and how the different countries interact.

“The difference is not access. It is a judgement of what risks we want to take, what to avoid, and how it fits together in a portfolio.”

He said that as markets become less synchronised, investors are spending more time on how portfolios are structured and how risks are distributed across them. “Advice is considered over years, not quarters.”

Escala said the growing dispersion between countries in growth, inflation, policy settings and sector composition is making it more important to look through regional labels, rather than relying on them in isolation.

Tracey McNaughton, Chief Investment Officer at Escala, said recent market behaviour has reinforced the value of that approach.

“Japan is a good example,” Ms McNaughton said. “Corporate governance reform and changes in capital management have supported a distinct investment case that is not captured by a broad ‘Asia’ allocation.”

She said a similar divergence is evident across emerging markets.

“Broad market indices can give the impression of consistency where that does not exist.

“The differences between countries such as India and China in terms of growth, policy direction and capital flows are meaningful. Even within Asia, markets like South Korea are being influenced by their own mix of reform and sector exposure.”

South Korea was among the strongest-performing equity markets globally last year, as semiconductor demand and corporate reform momentum helped offset concerns around US tariffs.

This divergence pattern has continued into this year.

“The MSCI World Index returned 5.2% year-to-date to 30 April 2026, while the MSCI Emerging Markets Index returned 13.9% over the same period. In US dollar terms, these figures mask significant dispersion between the strongest and weakest country markets inside those indices,” Ms McNaughton added.

“In some cases, technology-exposed markets have advanced sharply, while others tied more closely to energy, financials or domestic demand have lagged, despite sitting within the same regional grouping.

“The same pattern can be seen in geopolitical tail risks. Looking at exposure at a country level helps clarify where risk is concentrated, which markets are absorbing those risks, and which are less exposed.”

Escala said a more granular understanding of geographic exposure can improve portfolio construction by helping investors better assess diversification and identify where risks and opportunities are concentrated.

“Diversification is not only about how many regions you hold,” Mr James said. “It is about how those exposures behave together.”

He said this is particularly relevant for clients making long-term decisions across generations or managing capital against defined objectives.

“The aim is to build portfolios that hold up over time, and make decisions that clients remain comfortable with.”

Escala emphasised that this approach is underpinned by a disciplined investment process, including country-level macro and policy analysis, identifying structural drivers of return, and implementing exposures through carefully selected managers with a focus on risk, liquidity and portfolio fit.

Ms McNaughton said the value ultimately comes down to execution. “Identifying a market that looks attractive remains extremely important. As important, is to understand its role in the portfolio and how it contributes to overall outcomes.”

Escala expects this more considered approach to global investing to remain vital as the world shifts from a rules-based order to one dictated more by state-backed industrial policy.

“In a more complex environment, clarity becomes more important,” said Mr James.

“Broad exposures remain part of the solution, but understanding what sits beneath them, and where adjustments need to be made, is where the real value is added.”

]]>

Ben James

Escala, an Australian private wealth investment and advisory firm, working with high-net-worth individuals and families, family offices and not-for-profit organisations, says investors need to place greater emphasis on understanding the country-level drivers shaping global markets, as differences between economies play a larger role in outcomes.

The firm works with clients who have complex financial needs, and where their investment decisions extend beyond markets to structure, timing and long-term objectives.

Escala says that while broad regional exposures such as ‘Europe’ and ‘emerging markets’ remain a useful foundation, they are increasingly being complemented by a more granular view of the underlying exposures within those regions.

Ben James, Chief Executive Officer at Escala, said the shift reflects how portfolios are being constructed rather than a change in overall direction.

“For most clients, this is not about moving away from global exposures,” Mr James said. “It is about understanding them more clearly and understanding where capital is actually deployed, what is driving returns, and how the different countries interact.

“The difference is not access. It is a judgement of what risks we want to take, what to avoid, and how it fits together in a portfolio.”

He said that as markets become less synchronised, investors are spending more time on how portfolios are structured and how risks are distributed across them. “Advice is considered over years, not quarters.”

Escala said the growing dispersion between countries in growth, inflation, policy settings and sector composition is making it more important to look through regional labels, rather than relying on them in isolation.

Tracey McNaughton, Chief Investment Officer at Escala, said recent market behaviour has reinforced the value of that approach.

“Japan is a good example,” Ms McNaughton said. “Corporate governance reform and changes in capital management have supported a distinct investment case that is not captured by a broad ‘Asia’ allocation.”

She said a similar divergence is evident across emerging markets.

“Broad market indices can give the impression of consistency where that does not exist.

“The differences between countries such as India and China in terms of growth, policy direction and capital flows are meaningful. Even within Asia, markets like South Korea are being influenced by their own mix of reform and sector exposure.”

South Korea was among the strongest-performing equity markets globally last year, as semiconductor demand and corporate reform momentum helped offset concerns around US tariffs.

This divergence pattern has continued into this year.

“The MSCI World Index returned 5.2% year-to-date to 30 April 2026, while the MSCI Emerging Markets Index returned 13.9% over the same period. In US dollar terms, these figures mask significant dispersion between the strongest and weakest country markets inside those indices,” Ms McNaughton added.

“In some cases, technology-exposed markets have advanced sharply, while others tied more closely to energy, financials or domestic demand have lagged, despite sitting within the same regional grouping.

“The same pattern can be seen in geopolitical tail risks. Looking at exposure at a country level helps clarify where risk is concentrated, which markets are absorbing those risks, and which are less exposed.”

Escala said a more granular understanding of geographic exposure can improve portfolio construction by helping investors better assess diversification and identify where risks and opportunities are concentrated.

“Diversification is not only about how many regions you hold,” Mr James said. “It is about how those exposures behave together.”

He said this is particularly relevant for clients making long-term decisions across generations or managing capital against defined objectives.

“The aim is to build portfolios that hold up over time, and make decisions that clients remain comfortable with.”

Escala emphasised that this approach is underpinned by a disciplined investment process, including country-level macro and policy analysis, identifying structural drivers of return, and implementing exposures through carefully selected managers with a focus on risk, liquidity and portfolio fit.

Ms McNaughton said the value ultimately comes down to execution. “Identifying a market that looks attractive remains extremely important. As important, is to understand its role in the portfolio and how it contributes to overall outcomes.”

Escala expects this more considered approach to global investing to remain vital as the world shifts from a rules-based order to one dictated more by state-backed industrial policy.

“In a more complex environment, clarity becomes more important,” said Mr James.

“Broad exposures remain part of the solution, but understanding what sits beneath them, and where adjustments need to be made, is where the real value is added.”

The post Escala says country-level insight is becoming critical to sophisticated global portfolios appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2026/05/escala-says-country-level-insight-is-becoming-critical-to-sophisticated-global-portfolios/feed/ 0 Escala taps private markets expert Neil Stanford to drive alternatives strategy https://www.adviservoice.com.au/2025/09/escala-taps-private-markets-expert-neil-stanford-to-drive-alternatives-strategy/ https://www.adviservoice.com.au/2025/09/escala-taps-private-markets-expert-neil-stanford-to-drive-alternatives-strategy/#respond Thu, 04 Sep 2025 21:20:18 +0000 https://www.adviservoice.com.au/?p=106046 Escala Partners, one of Australia’s premier wealth advisory firms, has strengthened its investment team with the appointment of Neil Stanford as Investment Specialist, with a focus on alternative investments.

Stanford is an experienced private markets investor with a career spanning more than two decades across asset consulting, direct investing and venture capital strategies.

One of his most significant roles was as Head of Private Equity and Venture Capital at Hostplus, where he established the fund’s direct co-investment program and positioned Hostplus as a recognised leader in venture investing. He has also worked at the Clean Energy Finance Corporation, led the Venture Capital investment strategy at Breakthrough Victoria and as JANA Consultant was responsible for consulting and investment research. He began his investment career at Russell Investments as a private equity, infrastructure and alternatives researcher.

Ben James, CEO of Escala Partners, said Stanford’s appointment reflects Escala’s increasing focus on sophisticated strategies beyond traditional markets. “We are pleased to have Neil join our team at a time when we are increasingly offering our clients access to high-quality alternative investments. The landscape for investors is changing and our clients are no longer satisfied with traditional exposures to equities and bonds. They want exposure to private markets, venture and alternative strategies that can drive returns whilst balancing risk. Neil’s deep experience in structuring co-investments and identifying value in complex markets will be instrumental in delivering that.”

James added that Escala’s strength lies in bridging advice with execution. “At Escala, our advisors and investment specialists work hand in hand to ensure that our clients are not only aware of the forces shaping global markets but also have access to practical solutions that can enhance their portfolios. Neil will play a central role in building that bridge between research, strategy and execution.”

Chief Investment Officer Tracey McNaughton emphasised the importance of alternatives in the firm’s client offering. “At Escala, we are strengthening our commitment to alternative investments given the asset class’s ability to enhance returns, reduce volatility and offer meaningful diversification. Private markets can provide access to growth opportunities that are less correlated to public markets, but thoughtful portfolio construction is critical. Neil brings not only a proven track record, but also the ability to align opportunities with the long-term wealth goals of our clients.”

McNaughton added that Stanford’s venture capital experience would be a strong complement to Escala’s existing capabilities. “Venture and private equity are not just about chasing the next big thing; they are about identifying businesses and assets that can compound value over decades. Neil has demonstrated that discipline throughout his career, and we are excited to bring that expertise to our clients.”

Stanford said he was excited to join Escala at a time of growing demand for alternative investments. “What drew me to Escala was its commitment to delivering truly bespoke solutions for clients. Alternatives are no longer on the fringe, but a core part of sophisticated portfolios. I look forward to bringing my experience in building co-investment programs and venture strategies to help Escala’s clients access opportunities that are differentiated, resilient and aligned with their long-term wealth ambitions.”

]]> Escala Partners, one of Australia’s premier wealth advisory firms, has strengthened its investment team with the appointment of Neil Stanford as Investment Specialist, with a focus on alternative investments.

Stanford is an experienced private markets investor with a career spanning more than two decades across asset consulting, direct investing and venture capital strategies.

One of his most significant roles was as Head of Private Equity and Venture Capital at Hostplus, where he established the fund’s direct co-investment program and positioned Hostplus as a recognised leader in venture investing. He has also worked at the Clean Energy Finance Corporation, led the Venture Capital investment strategy at Breakthrough Victoria and as JANA Consultant was responsible for consulting and investment research. He began his investment career at Russell Investments as a private equity, infrastructure and alternatives researcher.

Ben James, CEO of Escala Partners, said Stanford’s appointment reflects Escala’s increasing focus on sophisticated strategies beyond traditional markets. “We are pleased to have Neil join our team at a time when we are increasingly offering our clients access to high-quality alternative investments. The landscape for investors is changing and our clients are no longer satisfied with traditional exposures to equities and bonds. They want exposure to private markets, venture and alternative strategies that can drive returns whilst balancing risk. Neil’s deep experience in structuring co-investments and identifying value in complex markets will be instrumental in delivering that.”

James added that Escala’s strength lies in bridging advice with execution. “At Escala, our advisors and investment specialists work hand in hand to ensure that our clients are not only aware of the forces shaping global markets but also have access to practical solutions that can enhance their portfolios. Neil will play a central role in building that bridge between research, strategy and execution.”

Chief Investment Officer Tracey McNaughton emphasised the importance of alternatives in the firm’s client offering. “At Escala, we are strengthening our commitment to alternative investments given the asset class’s ability to enhance returns, reduce volatility and offer meaningful diversification. Private markets can provide access to growth opportunities that are less correlated to public markets, but thoughtful portfolio construction is critical. Neil brings not only a proven track record, but also the ability to align opportunities with the long-term wealth goals of our clients.”

McNaughton added that Stanford’s venture capital experience would be a strong complement to Escala’s existing capabilities. “Venture and private equity are not just about chasing the next big thing; they are about identifying businesses and assets that can compound value over decades. Neil has demonstrated that discipline throughout his career, and we are excited to bring that expertise to our clients.”

Stanford said he was excited to join Escala at a time of growing demand for alternative investments. “What drew me to Escala was its commitment to delivering truly bespoke solutions for clients. Alternatives are no longer on the fringe, but a core part of sophisticated portfolios. I look forward to bringing my experience in building co-investment programs and venture strategies to help Escala’s clients access opportunities that are differentiated, resilient and aligned with their long-term wealth ambitions.”

The post Escala taps private markets expert Neil Stanford to drive alternatives strategy appeared first on AdviserVoice.

]]> https://www.adviservoice.com.au/2025/09/escala-taps-private-markets-expert-neil-stanford-to-drive-alternatives-strategy/feed/ 0