Insight Investment Australia

Might this be a golden age for fixed income investors? April LaRusse, Insight’s Head of Investment Specialists, joined ausbiz to discuss the attractive yields on offer and how volatility is creating opportunities for active investors. Watch the interview here: https://lnkd.in/edJzTbyS For wholesale investors only.

Harvey Bradley, Portfolio Manager at Insight Investment, states that the RBA’s decision to keep the cash rate on hold reflects a “holding pattern” amidst mixed data, reports Joshua Peach. Harvey expects that the RBA will maintain this stance longer than other developed markets’ central banks, with a projected cut coming early next year, when inflation is anticipated to fall closer to the RBAs target. Read more at the The Australian Financial Review blog: https://bit.ly/3xmiHHX For wholesale investors only.

Christopher Broadley, Portfolio Manager at Insight Investment, said: “This week’s chart looks at the changing correlation between US equity and government bonds. The long period of negative correlation (the ideal relationship for 60/40 investors) that began in the early 2000s and lasted until the post-COVID inflation surge is now firmly in the rear-view mirror. On both a one- and three-year view, the equity-bond correlation continues to rise, supported by above-target inflation. This reduces the benefit that government bonds offer to multi-asset investors in terms of the amount of diversification they offer. This challenge highlights the advantage of portfolios that diversify across a wider spectrum of asset classes." Click here to see our chart of the week: https://bit.ly/3xRnT6t For wholesale investors only.

Kristin Qi, Portfolio Analyst at Insight Investment, said: “Since its peak, US inflation has proved stickier than expected, in part due to the resilience of US economic activity. A continued moderation in growth is likely to be necessary for the Fed to return inflation to target on a sustained basis. With recent economic growth data consistently surprising to the downside, a soft landing still appears achievable. The question is whether the Fed can ease policy with sufficient precision to keep the economy from slipping into recession, but with growth sufficiently modest to keep inflation subdued and on a more predicable trend. June’s below consensus CPI print keeps the dream alive, and that continues to underpin risk assets.” Click here to view our chart of the week: https://bit.ly/3xRnT6t For wholesale investors only.

Shantanu Tandon, portfolio manager at Insight Investment, said: “2024 is set be a pivotal year for elections with over 60 countries and regions covering more than 4 billion people scheduled to hold elections. European Union elections have seen a swing towards right-wing parties. France has been added to the list, announcing surprise parliamentary elections to be held over June and July. This has contributed to additional volatility in European equity markets but there has been limited spillover to other regions for the time being. We retain our procyclical outlook for now as the macro backdrop remains broadly supportive." Click here to see our chart of the week: https://bit.ly/3xRnT6t For wholesale investors only.

We expect the RBA will be the last of the developed central banks to cut. The bank gave no signal of an intention to cut at its June meeting, as it expressed concern at the persistence of inflation. Cuts may only be on the table early next year. See our analysis here. For wholesale investors only.

In this ausbiz interview, Jonathan Crone, Portfolio Manager, dives deep into the resilience of equity markets amidst heightened yields, attributing it to stronger-than-anticipated economic growth. He notes a widespread increase in global earnings, advocating for diversified equity positioning, particularly in Asian markets, and highlights opportunities in both the tech and undervalued sectors. Watch the full interview here: https://bit.ly/3yI9LNu For wholesale investors only.

Christopher Broadley, Portfolio Manager at Insight Investment, said: “The Magnificent 7 achieved new highs this week driving another solid month for US equities as the market capitalisation of these stocks as a percentage of the S&P 500 Index hit a new high of 32%. Caution of any such concentration is generally wise, although it’s important not to overlook the fundamentals that have underpinned this move. In the current earnings cycle Apple has announced a $110bn buy-back programme, while Alphabet declared its first ever dividend. This week’s move has been driven by Nvidia, which has found itself at the forefront of the current Artificial Intelligence boom. A 226% increase in year-on-year revenue sent the stock price up by 20% since the company released its earnings, propelling it to within a whisker of becoming the 2nd largest company in the US.” Click here to see our chart of the week: https://bit.ly/3xRnT6t For wholesale investors only.

In this ausbiz interview, Harvey Bradley, Senior Portfolio Manager, discusses the impending decision from central banks regarding rate cuts. He tells Andrew Geoghegan that market expectations have shifted to a single cut in 2024 and argues that the Federal Reserve would need to consider hikes being the next move in order to surprise the market. Harvey also notes that provided the Reserve Bank of Australia don’t raise rates further, Australian bonds are in an attractive position. Watch the full interview here: https://bit.ly/4bg6ovl For wholesale investor only.

“Welcome to the new golden age of bond investing,” said Insight’s Adam Whiteley, Head of Global Credit, in conversation with InvestorDaily . “Global equities, as measured by the MSCI World Index, have delivered an annualised return of about 5.25 per cent since 2000. Not bad, but when investors can lock in coupon payments that match historical equity returns without equity risk factors, we think we are in a new golden age for bonds.” Read more here: https://bit.ly/4agH6ft For wholesale investors only.