Most fund managers had a strong year in FY2018, but past bumper years when MTAA invested heavily in so called ‘low risk’ illiquid assets provide a warning in less fortuitous markets.
Author Archive | Campbell Dawson
Many retail investors have turned to unrated or high-yield corporate bonds in recent years, but conditions have been favourable. Watch for the once-a-decade spikes in default rates.
The implications for hybrids, bank margins and bank fees from the increase in the risk-weighting of residential mortgages and learning our banks are not top quartile among the capital levels of global banks.
Until recently, institutional investors did not buy many bank hybrids, leaving issue size and margins subject to retail demand. But retail investors, including SMSFs, no longer have the market to themselves.
Diversified income funds have been extremely popular and have performed well recently, but ‘income’ is often not really income at all. If there is a reversal in some or all of the underlying factors, returns are at risk.