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MFS Investment Management

The Disappearance of Diversification

Historically high market concentration has led to higher risk for investors with portfolios that closely track the S&P 500 Index. As concentration decreases, the largest companies tend to lag the returns of the broader market.

A resilience recipe for what comes next

Resilience begins with being aware of where you have come from compared to where you are now and adjusting portfolios accordingly. This means moderating return expectations and eschewing more risk to make up for the reduced market beta.

Fixed income is attractive, but beware of 'fake' yield

Soaring policy rates have made cash a competitive asset again, prompting an overdue de-rating of risk assets. But just because yields are higher, that doesn’t mean risk is lower.

Fixed income: Volatility and uncertainty here to stay

Two words come to mind when describing fixed income markets at present: volatility and uncertainty. The macro factors influencing the current environment include COVID's legacy, war in Ukraine, high inflation, tightening monetary policy and a strong dollar.

The case for a strategic allocation to EMD in Australian portfolios

With equity valuations at all-time highs, fixed income yields at or near historic lows and volatility top of mind for investors, the emerging market debt (EMD) asset class may warrant a closer look for Australian investors.

It’s the second mouse that gets the cheese

The markets are awash in crosscurrents, so it’s critical to focus on what’s material and filter out market noise. When things get complicated, it's helpful to try to simplify them.

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Retirement

Retirement is a risky business for most people

While encouraging people to draw down on their accumulated wealth in retirement might be good public policy, several million retirees disagree because they are purposefully conserving that capital. It’s time for a different approach.

Investment strategies

Why ASX miners will handily beat banks in the long-term

After a stellar run for banks, investors are wondering whether they can continue their outperformance or if a rotation into miners is imminent. There’s a good case that a switch is coming, and it may last decades, not just years.

Investment strategies

After DeepSeek, what's next for the big US tech companies?

DeepSeek has surprised investors, but it shouldn't: it's part of a normal capital cycle. Big tech companies have made a lot of money, which attracts capital and competition, and eventually hurts returns and incumbent share prices.

Economy

The case for Australian AI

If Australia is to control its own destiny in an AI-enabled future, it must build its own infrastructure, not rent it from overseas. Creating homemade AI is the first critical step in the long process of building Australia's AI economy.

How Nextflix is staying ahead of the competition

The TV streaming business has become increasingly competitive, yet Netflix has managed to grow market share and become the dominant player. Here's how it's done that, and the opportunities it has moving forwards.

Investment strategies

The million-dollar banana and the power of story

Markets are not driven by numbers alone. Examples from Tesla shares to Sydney houses show that investors must evaluate not just tangible assets or financials, but also the intangible story that magnifies their value.

Retirement

An alternative asset class for income-seeking retirees

A big market sell-off can force pensioners to 'sell cheap' in order to meet their miniumum withdrawal requirements. Investing in less volatile assets that also deliver regular income could provide an alternative.

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