Hiding in Cash – When Defensive Becomes Expensive
With persistent uncertainty in global markets, it’s unsurprising to see increased demand for cash and cash equivalents, especially given short-term money markets are currently yielding circa 5.45% pa. However, while cash undoubtedly has an important and irreplaceable role to play as part of the investment mix, it shouldn’t be perceived or used as a substitute […]
In a Higher for Longer Environment, Fixed Income Needs to be Considered
With inflation likely to remain higher for longer than expected, interest rates are also likely to remain elevated as central banks seek to prevent any resurgence of exuberance. For many investors, this environment is boosting the allure of fixed-income relative to global equities markets, and this is unsurprising given the current disparity between the available […]
Structuring client portfolios for a better retirement
When it comes to effectively structuring client portfolios for retirement, allocating investment capital to safer and less volatile asset classes is imperative. Fixed-income securities including corporate bonds can play a pivotal role in providing much-needed portfolio stability and predictable income, reducing some of the inherent volatility associated with equity investing. While fixed-income securities generally move […]
Financial Stability in Retirement: Why Advisers Should Consider Fixed-Income Securities For Clients
New research released last week revealed that the top concern for Australians aged over 50 was running out of savings in retirement. The results are somewhat unsurprising given both inflation and interest rates have surged since COVID-19 lockdowns. While inflation has begun to erode the purchasing power of savings, aggressive monetary tightening has slammed the […]
Bonds Are Back – Why Advisers Should Be Considering Fixed Income Securities For Client Portfolios
The global response to COVID-19 unleashed a wave of fiscal stimulus and set into motion the beginning of the end for the prevailing ultra-low interest rate environment. From supply chain disruptions to a dramatic increase in the global money supply, the dynamics of the global economy have undergone seismic changes, ushering in a new era […]
At An Inflection Point – Where Next For Interest Rates?
With last week’s CPI figures showing inflation is cooling at a faster rate than expected, another RBA rate hike seems unlikely (but not impossible) at tomorrow’s meeting. The million dollar question is, where next for interest rates? After 12 official cash rate hikes in 15 months, and with their full impact yet to be felt […]
Interest In Corporate Debt Climbing As Future Fund Doubles Domestic Exposure to $1 Billion
With fixed income assets now offering their highest yields in over a decade, institutional investors are significantly increasing their exposures to the asset class. Just last week Australia’s sovereign wealth fund, the Future Fund, announced it had doubled its domestic corporate debt exposure to $1 billion while AustralianSuper, Australia’s largest super fund also confirmed it […]
Optimising Client Portfolios In Retirement: The Unique Role Of Corporate Bonds
From goods and services inflation to surging energy costs, a retiring couple today needs more than $70,000 a year to live comfortably, while an individual needs just over $50,000 a year, according to the Association of Superannuation Funds Australia (ASFA). For investment advisers, this underscores the critical importance of structuring and managing multi-asset portfolios which […]
Investor risk appetites – where corporate bonds fit
The 60/40 portfolio model has been a mainstay of the investment world for decades, and for most of that time it has served investors very well. It calls for 60% of a portfolio to be allocated to equities to drive growth, and the remainder to be devoted to bonds to provide stability when financial markets […]
The role of corporate bonds in retirement planning for your client
Your clients are almost certainly familiar with equities and how they can generate an income in retirement. However, they probably know very little about the role that corporate bonds can play in mapping out fixed income streams in retirement planning. Yet these instruments feature heavily in the financial plans of US and European investors because […]