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Latest Asset Allocation Update – Yield curve inversion: Don’t panic, but begin to prepare
Key Points: Stay overweight risk assets, despite US yield curve inversion. It’s not only the US yield curve that is signaling a US recession. Key business surveys are also beating the same drum. However, these signals lead the large equity market drawdown associated...
Cross Asset – March 2022
Key Points: In our latest Cross-asset review, we note the materially positive moves in Commodities, AUD and to some extend the Australian equity market; reflecting war-related supply shocks in the commodity market. On the other hand, Gold price and VIX (US and...
ASX Reporting Season Update: Plenty of Bright Spots, despite cost pressures
Key Points: The ASX200’s heavy weight stocks such as BHP, RIO, CBA, and CSL all delivered positive earnings results and this provides comfort in our overweight position in the Australian market. Reporting season was generally very solid, with analysts providing a...
Cross Asset Review – January 2022
Key Insights In our latest Cross-asset review, we note the spikes in local and US VIX (share price volatility indices) as well as the Gold price, reflecting rising risk aversion. The rise in inflationary expectations saw increases in real asset prices in January 2022...
Its on: the fight against inflation
Key Points: Stay overweight growth assets. It’s too early to position for a recessionary global equity market drawdown. Equity market Investors need to accept that returns will be more modest they have been over the past couple of years and that volatility will...
Australian and Global Market Outlook – Your Strategy for 2022
Key Points The outlook for 2022 is more uncertain than 2021 was at this time last year. Last year the vaccination rollout was accelerating in developed markets and opening up was being planned. EM vaccination is still limping along and the emergence of a new variant...
Slidedeck: Your Asset Allocation Strategy for 2022
Key Points The pandemic is not over Global inflation The business cycle Geopolitics Key asset class valuations TA A preferences and the AUD Please fill in your details to get report:
Cross Asset Review – October 2021
Key Insights In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi asset investors. In October, Emerging companies, AUD Currency Index and S&P 500 delivered positive returns while bonds and bond...
Australian Equity Factor Performance Report – October 2021
Key Points: In Foresight’s monthly Australian Equity Performance review, we look at the performance of key market factors: the various structural drivers of Australian share market. Foresight factor premiums show the returns attached to generally accepted, systematic...
Unpacking Inflation
Key Points: Stay overweight growth assets. The global inflation scare isn’t yet a trigger for a global central bank tightening cycle that will bring to end to the equity market rally and risk asset outperformance. Inflationary pressures are more concerning in the US...
Emerging Markets Equity Environment Analysis – September 2021
Key Points- September 2021 Market Review Momentum and Quality outperformed all other factors. Value style recovery continues across Global markets. Europe, Middle East and Africa outperform all other regional blocs; Top 2 European countries deliver returns in excess...
Global Equity Environment Analysis – September 2021
Key Points- September 2021 Market Review Frontier markets outperforms Developed markets and EM. At a country level, Developed markets like Austria and Netherlands, offered highest returns.. Value and Small Cap outperform all other factors over 1 year period. Value...
Doubling down on Aussie equities
Key Points: Stay overweight Australia. Australia is beginning to outperform the US and history shows this can last for at least 12 months. Furthermore, Australia tends to outperform when the US yield curve is steepening. This outperformance was absent during the...
Cross-Asset Review – An evident shift in risk-seeking investor behaviour maintained as vaccination goal rates achieved nation-wide.
Key Insights In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi asset investors. In September, Emerging companies and Commodities delivered high positive returns as nation’s vaccination rate...
Cutting though equity style around Fed tapering?
Key Points: In our previous note, we argued Fed tapering should not be feared by risk assets even though volatility is likely to increase. We have not changed our view and continue to run a modest overweight to risk assets, with a preference for Aussie equities over...
Global Equity Environment Analysis
Key Points- August 2021 Market Review Value and Small Cap outperform all other factors over 1 year period. Value style recovery slows down across Global markets. Developed market outperforms Frontier markets and EM. Top 2 Developed markets countries- Austria and...
Could it be Déjà vu on Fed Tapering?
Key Points: The prospect of Fed tapering should not be feared by risk assets, although asset allocators should be prepared for increased volatility. We continue to run a modest overweight to risk assets, with a preference for Aussie equities over the US and Europe....
Cross-Asset Review – An evident shift to risk-seeking investor behaviour realised as vaccine roll-out paces up.
Key Insights In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi asset investors. In August, risky assets like EM equities and REITs deliver high positive returns as vaccine roll-out accelerates...
Active Insights – Global Equity Value Managers
Key Takeaways Excess returns for Value managers was much higher at 6.10% over the past year compared to -1.56% pa over 5 years. During COVID 19 stressed period, the median Value manager was not able to deliver positive skill-based alpha. Key biases of Value managers...
FX Analysis & Outlook
Summary The recovery over the past 12 months has been led by a range of currencies – AUD gained significant ground against JPY (+6.57% yoy), HKD (+3.12%), USD (+2.83%), INR (+2.04%), EUR (+2.04%) and CHF (+2.00%). Against this backdrop, unhedged investors faced...
Cross-Asset Review – Investors move towards Safer Investments as the concerns over COVID 19 Delta variant grows
Key Insights In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi asset investors. In July, Safe haven assets like Gold and Bonds deliver high positive returns as concerns over COVID 19 Delta...
Asset Allocation – Dynamic and Strategic August 2021
Understanding the Drivers of Consensus Expectations • Global consensus is positioned for mid-cycle, and we agree with this assessment. The rapid increase in COVID-19 case numbers even in countries with relatively high vaccination rates is a key risk, but central banks...
Asset Allocation Insight – Business Cycle Analysis & its Implications for Asset Pricing.
Key insights • Covid-19 recession has been remarkably like past US recessions according to the yield curve and business surveys. • Yield curve is now steep in contrast to period just prior to recession, suggesting the business cycle is relatively immature and growth...
Asset Allocation Insight – Global Macro Cycle and Themes
Key insights • Countries with low vaccination rates and resurging case numbers (Australia, Korea, Indonesia, Japan) are facing economic pressure as health authorities respond with lockdowns and travel restrictions • Countries with low vaccination rates and low case...
Asset Allocation Insight – Current Asset Class Tilts
Key insights • We are at mid-cycle and the easy gains have been made, but we have a preference for risk assets. Valuations in both growth and defensive asset classes are stretched and there is little benefit in holding excess cash. It is now a game of relativities. •...
Global Equity Market Environment Review – Pandemic induced shock causes massive dispersion in global equity valuation and performance.
Key insights Global equities continued to recover as investor risk appetite improved on the back of cyclical economic and business recovery over the past 12 months. The 12 months return for all countries index clipped at 27.7% with EM outperforming DM and Frontier...
Cross-Asset Review – Risk seeking behaviour continues to be rewarded as Commodities, Small-, Mid- and Micro-Caps top the charts
Key Insights In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi asset investors. In June, risk on theme continued with real assets rebounding strongly. The top performing assets were Commodities...
Strategies for Adopting Gender-Lens Investing & Insights on Yielding Return and Impact
Summary This article examines Gender-Lens Investing as a growing investment framework that can influence social impact and achieve gender equality through financial mechanisms. It highlights some of the strategies fund managers and investors can adopt within private...
Emerging Market Equity Environment Analysis May 2021
Key Insights In this research article we assess the key drivers of Global emerging market equities. We note that significant fundamental dispersion (valuation) created by the 2020 pandemic has led to significant 12 month return dispersions across regions, countries,...
Global Equity Market Environment Analysis- Investors Rotate Towards Covid-19 Sensitive Sectors and Themes as Volatility Subsides
Key Insights In this research article we assess the key drivers of performance on global equity markets. We note that significant fundamental dispersion (valuation) created by the 2020 pandemic has led to significant 12 month return dispersions across regions,...
Inflation Hedges and Real Assets Outperform as Investors Re-price Inflation risks
In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi asset investors. In May, inflation hedges and real assets outperform as investors re-price inflation risks. The top performing assets in May...
Australian Equity Factor Performance Report – April 2021
In Foresight’s monthly Australian Equity Performance review, we look at the performance of key market factors: the various structural drivers of Australian share market. Foresight factor premiums show the returns attached to...
Assessing Carbon Resilience of Australian Equity Managers
Key Insights As governments and investors set targets to achive a net-zero emissions in the future, investment managers, capital allocators and consultants have a fundamental role to play in the transition process. While advancements in data, analytics and reporting...
Cross Asset Review April
In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi asset investors. In April, risk on theme continued with real assets rebounding strongly. The top performing assets were the Australian Micro and...
Cross Asset Review March
In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi asset investors. In the March quarter, the worst performing asset classes were the Australian Bonds, Global Aggregate Bonds and Gold. The...
Emerging Market Equity Environment Analysis- Dispersions and Stabilizing volatility creates opportunities for Investors
Key Insights Significant dispersions were noted across regions, countries, sectors and styles. Asia was the only region to deliver positive returns over the last one year, all other regions suffered losses. Mid/Momentum funds outperformed all other indices over all...
Analyst Insight- Australian Equities Value Managers deliver negative risk adjusted returns but higher downside protection during the COVID crisis.
Key Points We note that Australian equities value managers have delivered negative risk-adjusted returns during Covid-19 and have underperformed compared to peers. Investors may allocate a high proportion of portfolios to value managers when they look to capture...
Analyst Insight- Australian Equities Growth Managers deliver very strong risk adjusted returns and downside protection during COVID crisis.
Key Points We note that Australian equities growth managers have delivered better risk-adjusted returns during Covid-19 and performed better compared to peers. Investors may allocate a high proportion of portfolios to growth managers as they look to capture the...
Safety Assets Deliver Negative Returns in February
In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi-asset investors. During the month of February, the worst performing asset classes were Global and Australian REITs, the Australian Bonds...
Analyst Insight – Australian Equities Core Managers
Key Points We note that Australian equities core managers have delivered better risk-adjusted returns during Covid- 19 and performed better compared to peers. We find that investors may allocate a high proportion of portfolios to core managers as they look to capture...
1Q Cross Asset Review Paper
In this month’s Cross Asset Review, we assess the past performance of various asset classes and draw implications for multi asset investors. During the month of January, Risk-on trade continued despite spikes in fear gauges. The worst performing asset classes were...
Long Short Manager Diligence
Source: iStock This article explore how the GameStop shorting squeeze frenzy is forcing many long-short managers to re-think about their strategy. While this herding behaviour from ‘main street’ investors is a real risk for long-short funds, it remains to be seen...
Truth or Tale: Does Climate Change Reduce Economic Growth?
Source: iStock This blog piece reiterates how studies around climate change and how they do not negatively affect a nation's GDP are largely inconsistent, particularly when considering the variations among developed and developing nations economies and climate...
Climate Change Action: How do we invest in it and what do we need to keep in mind?
Source: iStock This blog piece discusses the urgency required for climate change action, as well as how investors can contribute to climate impact through mechanisms of selective capital allocation and shareholder engagement. It explains the frameworks that should be...
How We Should Be Thinking About Carbon Risks in Portfolios
Source: ABC News (2019) Carbon risk data can be useful in highlighting a fund's ESG position, though it is also not wholly encompassing of a fund's carbon impact. This blog post explores the importance of taking a 360-degree perspective on carbon risk analysis in...
Learned Lessons on ESG Investing from the Current Boohoo Slavery Scandal
There has been a strong chorus for sustainable investing in the financial sector, with more than 120 billion Euros poured into across 360 ESG-focused funds in Europe last year, according to data provider Morningstar. However, ESG-focused funds have since highlighted...
Australian Equity Factor Performance During Stressed Markets
The aim of this research paper is to present our analysis of the key drivers (factors) of the Australian share market over the medium-to-long term, as well as during stressed market periods of the current Global Virus Crisis (GVC), the Global Financial Crisis (GFC),...
A Guide to Portfolio Stress Testing.
Using our collective experience across investment management, investment research, data science and risk analytics, we have pulled together this guide for members of the investment community wanting to better understand Stress Testing. The guide is designed to help...
Australian Equity Factor Performance During Stressed Markets
In this edition of our paper, we present the performance of key factors during the current Global Virus Crisis (GVC) and place this in context of previous stressed market periods. Foresight factor premium analysis focuses on the returns attached to generally accepted,...
Latest update on Foresight COVID-19 model – trends and projections for major economies
In this edition of our blog we report the latest figures from Foresight Covid-19 model whichassess the growth trajectories of confirmed, active, fatal and recoveredCOVID-19 cases for global economies. Our results show significant dispersion in doubling rates across...