Focussing on the quality of a company and how it’s likely to perform is a key part of a high-conviction strategy, says fund manager Claremont Global. It’s also a useful strategy for investors who want access to the AI-fuelled tech phenomenon in the US without getting caught up in the noise.
Tensions in Australia’s relationship with China, along with our neighbour’s weak growth other headwinds, have Australians shying off investing in the world’s second largest economy. But given the countries’ deep connections, ignoring China is easier said than done.
The “decidedly subpar” investor experience with managed funds is often down to two factors – overstretched portfolios and human bias – that a high-conviction focus on quality stocks can help avoid, according to Claremont Global’s Bob Desmond.
The best Asian private equity funds often outperform their developed-market counterparts, with less underlying leverage and more growth potential. Several structural tailwinds also support opportunities for the right PE strategies in Asian markets, says Morgan Stanley.
With global growth expectations already under pressure, drought-fuelled disruption to the Panama Canal shipping route is bringing supply-chain slowdowns back to the fore, just in time to do maximal economic damage.
While analysts see a negotiated deal as the most likely outcome, a compromise is still not guaranteed. The bigger concern, they say, stems from ballooning government debt loads across developed markets in the wake of pandemic spending.
India’s booming population has many considering whether and how to get exposure to its market, despite its year-to-date underperformance. While it may not be the next China, India’s growth prospects remain attractive, driven by multiple tailwinds, and investors now have more points of access, Mason Stevens says.
While global markets recorded a second consecutive quarter of growth in Q1, only 13 per cent of ASX200 results beat forecasts, and signs that an economic reckoning is ready to unfold are flashing red, analysts say.
With rising financial stability risk complicating the already uncertain outlook for global economies, the IMF warns a hard landing is becoming more likely, while Australia is set for particularly weak growth in the short-term. Inflation remains the prevailing concern.
For those planning to invest in offshore assets, the decision whether to hedge currency exposure is an important one as movements in the Australian dollar can either erode or add value to an investment.
An explosive report by activist short seller Hindenburg Research led Adani Group to shelve a planned US$2.5 billion equity sale and wiped $120 billion from the multinational conglomerate’s market value. While activist short reports should be taken with a grain of salt, market observers said, some of Hindenburg’s key claims are likely valid – including that Adani was vastly overpriced.
Markets have moved sharply to reprice Chinese assets upwards after the world’s second-largest economy signalled its reopening. However, some doubt the sustainability of the current bull market, saying key ingredients for a lasting recovery are missing.