Market Insights

Key Points: We recently updated our TAA/DAA outlook and are now positioned for recession.  We recommended a weight of 3/10 in Growth assets and 4/10 in defensive assets with our highest weight 7/10 in cash (TAA Updated Q3 2022 – 15 September).  Equities are unlikely...

Key Points: Recessionary winds are blowing and it’s time to pull down the sails. In equities, the tactical rally back after the correction in the first half of the year appears to have run its course. Tuesday’s US CPI was a timely reminder that the inflation threat...

Key Points: Our analysis of the Australian long-short managers shows encouraging results over the past two years. Historically, A-L/S managers have had mixed performance track records. As always, manager performance dispersion has increased, the median manager has...

Key Points:  Investors need to keep in mind that reporting season in Australia is occurring at a significant turning point in the global economic cycle. Cost pressures have been well understood and there were not too many misses solely on underestimated costs....

Australian Equity Factor Performance Report

cross asset review

Key Points:  Our recession lead indicators are flashing red and recession is inevitable. However, it’s still too early to increase the underweight in risk assets. The 2-year bond yield hasn’t begun to price in an easing cycle yet, and this is normally the final nail...

Key Points:  Remain slightly underweight growth assets. Markets fully understand that rising interest rates and inflation create a backdrop for recession. Indeed, in our recent TAA/DAA update we showed how our suite of indicators suggests recession is likely, but it...

Key Points Emerging Market Equity Disappointment Persists: EM equities (in AUD terms) have delivered mediocre returns in both absolute and relative terms. Many active managers with high allocation/ high beta to EM equites have faced major headwinds in their...

Key Points Market Background: Developed markets rallied as the initial volatility sparked by Russia’s invasion of Ukraine subsided in most markets throughout March. US and Australian equities made significant gains with the S&P 500 and All Ordinaries up 3.57% and...

Key Points: Raise the bar on cash and alternatives. Move slightly underweight Growth assets and maintain the large underweight in Defensive assets. The correction in equities, thus far, is consistent with those seen just prior to recessions. A tactical rally is...

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...

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...

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...

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...

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...

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:

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...

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...

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...

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...

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...

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...

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...

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...

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...

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....

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...

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...

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...

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...

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...

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...

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...

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. •...

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...

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...

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,...

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,...

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...

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...

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...

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...

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...

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...

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...