Investing success is often not just about picking the right asset class or securities – but also avoiding the poor investments. In the current global economic environment, out of the world’s major asset classes, it’s hard to go past global bonds as having potentially the lowest likely return over the next year or so. Let
Should you hold individual bonds and “do it yourself” or a diversified bond fund/ETF? One commonly held belief in investing is that holding individual bonds entails less risk than bond funds, due to the return of principal at maturity. Is this correct? If so, does it matter? Ultimately, it depends on the role bonds play
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
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
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
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
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.
BetaShares recently expanded its product range to include our first fixed income/bond fund, the BetaShares Australian Bank Senior Floating Rate Bond ETF (ASX Code: QPON). Due to the level of interest we have had in this fund so far, I thought it would be timely to write a short series on the basics of Bonds.
As investors, many of us like to be on the lookout for new opportunities that add value to our portfolios and are trying to make sure that our portfolios are protected during market downturns. An often overlooked or misunderstood asset class that can assist in both adding value to a portfolio and provide some protection
There’s no doubt exchange traded funds (ETFs) are shaking up the wealth industry across the world, including Australia, and, as such have naturally attracted their fair share of friends and detractors in the process. As a relatively new product in Australia, it’s also understandable that many investors are still learning to sort through the many