Although some domestic cyclical companies currently offer value, the attraction of offshore growth is a key factor for investors, including strong Australian companies with global aspirations.
Tag Archives | global shares
Stocks are vulnerable if interest rates rise much faster than expected on inflation concerns. What is the probability of this heightened risk and what are the consequences for portfolios?
The Australian market again delivered strong returns in 2017-2018 with big sector differences, but there were large variations in global performance depending on the currency hedging strategy.
SMSFs have long lagged institutional superannuation funds in allocating to global equities, but SMSFs trustees increasingly realise the best opportunities lie overseas, and they use managed funds as the vehicle.
There are more opportunities on offer in the larger and more diverse economies overseas, especially in companies with sizeable untapped market potential and an insulation from normal market forces.
Global stock markets could face the most volatile period since 2008-09. The danger is that US fiscal stimulus could fan inflation and lead to higher-than-expected interest rates. Risks are asymmetric to the downside.
The short-term volatility of share prices, and the rapid falls which hit markets every 15 years or so, disguise the wealth creation effects of share investments over a long-term horizon.
Stock markets overall had a good year in FY 2016/2017 while bonds and defensives like listed property struggled. Looking to the future, what are the three most-asked questions facing investors?
Most commentators believe there is a positive correlation between economic growth and share market performance. The data disproves this, at a world and country level and over time.
A recent analysis of SMSF asset allocation shows a movement away from direct equities as trustees struggle to find value in the large caps, and the continuing popularity of cash despite low rates.
Global small caps have outperformed large caps over the last 15 years, and offer sector and country diversity for Australian investors worthy of a small allocation in a portfolio, modelled at about 5%.
The best end-of-year wrap of asset class performance in 2015. Aussie equities was a loser but who were the winners, and what’s the outlook for each asset class in 2016?
Despite the recent falls, the performance of Chinese shares over the last 12 months is still above Japan, Europe, the US and Australia. But the Chinese market is a casino, and currency movements are more important.
Investing in global opportunities allows a portfolio to benefit from trends and industries that are not available in Australia, and even when a company is listed here, it may be cheaper overseas.
According to the ATO, SMSFs only hold 0.5% of their portfolios in global shares, despite the institutional average being over 20%. A closer look at the ATO data sources reveals that this statistic is most unreliable.
In some countries, stock markets have already surpassed their pre-GFC peaks. There are some surprising winners, and Australia lags despite our recent economic growth being the best in the developed world.