Modern portfolio theory suggests there are two kinds of risks in stock returns: Systematic or market risk, which investors attempt to ‘diversify’ away by adding a variety of assets to their portfolios; and Unsystematic or stock specific risk, which represents a stocks return that is not correlated with general market movements In recent times, global

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Although the official measure of house price inflation suggested Sydney property gains remained solid in the June quarter, more timely indicators point to a softening in this long red-hot market. That’s consistent with estimates suggesting mortgage affordability constraints in Sydney are now around previous peak levels.  Meanwhile, better value appears evident in other capital cities,

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Fixed-income investors seeking safety in bonds be warned: it took only a relatively modest rise in bond yields over the past year for Australia’s headline bond index to post negative returns.  This result highlights the risks that traditional fixed-rate bond investments currently pose to investors in an environment of low but rising bond yields.  By

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Onwards and upwards! The Australian ETF industry recorded another strong month of growth, with the industry rising to a fresh record high in August. Total industry FuM at the month end was $30.9B, which is a growth of 2.2% ($842m) for the month. While asset appreciation aided industry growth, the majority (75%) of the month’s growth

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After consistently solid monthly gains since late 2016, global stocks seem due for a period of consolidation at least, if not a corrective pull back. While the specific catalyst for this pull back remains unclear, likely candidates include concerns over North Korea, government shutdown/debt ceiling concerns in Washington, or a more abrupt lift in bond

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Exchange traded funds (ETPs) are an excellent option for those new to investing, due to a number of key advantages over other instruments: • Low cost • Liquidity • Potential for diversification • Low minimum investment amount • Wide range of investment choices available These advantages also make ETPs attractive vehicles for various trading and

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The rise in global equity prices in recent years has led to continued concerns over valuation levels.  One indicator that appears to cause endless nervousness is the so-called “Shiller” PE ratio, which considers US stock prices relative to the rolling 10-year average level of earnings.  As this note demonstrates, however, the Shiller PE ratio has

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For a long time, many investors have used ETFs tracking the Nasdaq 100 Index to gain exposure to the world’s technology and internet giants. However, as the ETF market expands, investors are provided with more choices to target specific sectors and investment themes. As such, it is becoming increasingly important for investors to understand the

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Although the Japanese economy has long been considered sluggish and blighted by deflation, it may surprise some investors to know that economic growth and corporate earnings growth in recent times have been impressively strong. What’s more, this improvement has been only partly rewarded by rising equity prices, leaving Japanese equities relatively cheap by global standards.

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