Fundamental Indexing: active management performance with index fees?

The case for passive investing is often couched in terms of the inability of active managers to “beat the market”, with the market in turn usually defined as a capitalisation weighted equity index such as the S&P/ASX 200. Yet as this note will demonstrate, using an alternative approach to passive indexing can potentially be used

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Vive La France

The Week in Review Fears over North Korea hurt sentiment early last week as did lingering concerns over the French Presidential election (happily resolved overnight!) but this was countered by an encouraging start to the US earnings reporting season. And adding a cherry on top were comments from US President Trump on Friday indicating a

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U.S Market Outlook: back to 2004?

Amid the geopolitical concerns simmering across the globe, the upcoming United States earnings reporting season has received less than usual attention. That’s a shame because early indications suggest corporate earnings are travelling reasonably well.  In fact, despite high valuations, US stocks could keep rising if earnings continue to grow – as seen, for example, between

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Sabre rattling helps gold

The Week in Review Geo-political tensions were the main theme of last week, with concerns over a possible US-Russia dispute arising out of the Syrian missile strike giving way to heightened tensions over North Korea. US President Trump seems to have adopted a “it’s time to clean this mess up once and for all” approach,

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Thoughts on Australia’s housing “bubble”

Media commentary has been dominated in recent weeks by talk of Australia’s growing “housing bubble.” This note attempts to provide a factual perspective. It suggests that while Sydney house prices are now starting to reach past peaks in terms of mortgage (un)affordability, they are still a little below their average long-run premium to national house

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A softer tone

The Week in Review Although the key global development last week was the US strike on Syria, markets seemed to take it in their stride. Indeed, equities and bond yields ended the weekly largely unchanged, though the military action did help support gold and oil prices.  Helping support equities were upbeat US manufacturing and non-manufacturing

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Global Market Outlook: April 2017 – European Relief

Global stocks rose further in March, though more modestly than in February. While an earlier than expected Fed rate hike and Trump’s failure to pass healthcare reforms dented investor confidence, sentiment was supported by continued solid global economic reports and failure of the far-right parties to gain power in the Dutch national election. The outlook for

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ASX breaks its range

The Week in Review The key global development last week was solid US economic data in the form of a surge in consumer confidence and a modest upward revision to Q3 GDP.  This helped support equity markets and the $US as the disappointment regarding President Trump’s failure to pass healthcare reforms started to wane.  Bond

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Financials flex their muscles: what’s good for banks is good for the economy

The decision by major banks over recent weeks to unilaterally raise interest rates on residential property loans, especially for investors, appears to be officially sanctioned and could helpfully ease demand pressures in the Sydney and Melbourne housing markets. That said, greed can be good! These actions could also conveniently help boost bank net-interest margins, which

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Taxing Times

The Week in Review The key development last week was US President Trump’s failure to get his health care changes through Congress.  The US S&P 500 slumped 1.4% on Tuesday, and meandered at these lower levels for the rest of the week.  Trump has signalled he’s given up trying to make changes in this area

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