Market Insights Archives | BetaShares
Desperately seeking yield in a low-yield world: the case for bank hybrids

Desperately seeking income in a low-yield world: the case for bank hybrids

Reading time: 3 minutes
Hybrid securities have tended to offer attractive franked income returns for usually only moderate levels of capital volatility. As such, and especially in these times of very low cash and fixed-income returns, they offer a potentially useful additional source of income and diversification in many investor portfolios.

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Death and taxes

Global markets
Concern over rising COVID cases in hotspots such as Japan, Brazil and India set global equities back last week as did talk of a proposed hike in the U.S. capital gains tax for high-income earners. The end result was a small weekly pullback in stocks after four weekly gains,

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Top 5 blogs of 2020

Reading time: 1 minute
There was no shortage of things to write about in 2020! Among our most-read blogs of the last 12 months were articles on the corona virus and its implications for investors, analysis of the most bitterly-contested U.S. Presidential election in history and what it might mean for the markets,

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Trump’s time to throw in the towel?

News overnight that the United States and China would resume trade talks has understandably lifted the spirits of global investors.  To my mind, the new twist in the trade saga may well suggest one thing: Trump has conceded defeat.
Why would Trump cave?  Because of the growing signs that the trade war has inflicted “friendly fire”

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Dealing with Doomsday: 3 ways to hedge against a worst-case market scenario

Dealing with Doomsday: 3 ways to hedge against a worst-case market scenario

Reading time: 5 minutes
Given the ongoing trade war and slowing global growth, many investors are understandably concerned about the market outlook.  While I feel a ‘doomsday’ scenario is unlikely anytime soon, this note nonetheless considers what investment options might be of interest to those investors who hold grave concerns –

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Unnerving Inversion

Global Markets
Inversion of a key US yield curve measure (the gap between US 10-year and 2-year Federal Government bond yields) sent jitters through Wall Street last week, as did further signs of softer economic growth in Europe and China. The global stock pull back continued as did the rally in bond and gold prices.

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RBA may be fighting the last war

Comments following RBA Governor Phillip Lowe’s speech
Governor Lowe’s speech* can be taken as a strong defence of not only the current inflation-targeting regime, but also the current inflation target band of 2 to 3 % over the medium term.
The Governor suggests that to change the band would
1) undermine longer-term central bank credibility and
2) entrench a low inflation “mind-set”.

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Employment market at a turning point

The highlight of the coming week will no doubt be Thursday’s labour force report.  Given the notorious volatility in monthly employment changes, the single best measure of labour market trends remains the unemployment rate.
As seen in the charts below, the unemployment rate has been broadly trending lower since late-2014, which has been consistent with an improving trend in key labour market indicators such as the NAB employment index (from its monthly business survey) and the ANZ Jobs Ads series.

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Equities are (relatively) cheap!

The equity market is (relatively) cheap!
The extra-ordinary decline in local bond yields has now left the Australian equity market relatively cheap compared to bond markets.

Despite the S&P/ASX 200’s price-to-forward earnings ratio reaching a relatively high 16.1 at end-June (compared to an average of 14.2 since 2002), slumping bond yields have caused the so-called “equity-to-bond yield gap” to widen out to 4.9% (compared to an average of 2.9% since 2002).

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