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24 December 2024

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Welcome to the Firstlinks Edition 314

Welcome to the Firstlinks Edition 314
Graham Hand

Graham Hand


Strange times indeed. Despite US and Australian equity markets near all-time highs and superannuation funds enjoying record inflows, the wealth industry is undergoing a severe overhaul. Unprecedented numbers of fund managers are not only struggling but closing their doors. AMP is desperate to define a coherent advice strategy. Deutsche Bank announced a worldwide cull of 18,000 jobs, with an Australian closure of equity research, trading, sales, derivatives and capital markets. Financial advice groups are wondering how they will survive without grandfathered commissions, and many advisers will leave the industry.

What is disrupting asset managers? We lead with 10 reasons why many fund managers are quitting the market or shutting funds, and it has little to do with the popular excuses for everything like the Royal Commission, the Productivity Commission or technology changes.

Continuing our Interview Series, Nathan Hughes of Perpetual Investments explains how he manages an ethical fund and the importance of sticking to some long-term, proven principles.

Last time I went to Europe, €1,000 cost me A$1,620, but at the airport, the price would have been over A$2,000. Marcus Christoe offers four better ways to manage your FX travel needs.

What a turnaround in property since the election! Justin McCarthy shows why it has improved, and the implications for investors in the fixed interest funding markets.

Water resources and agribusiness have made headlines recently, and Cullen Gunn says investing in food and water assets is undergoing much greater sophistication.

Into the tax year, Julie Steed explains the new work test exemptions, while Warren Bird pushes back on those people who think they are somehow entitled to an age pension.

We prefer to focus on enduring investing ideas rather than speculate about the direction of markets. Every day, there are opposing views about the future prospects for the economy and stockmarkets, and I have no better predictive abilities than rolling a dice. Central banks seem determined to do 'whatever it takes' to prevent falling prices driven by deflationary forces, and who knows when the market will punish them. Selling 'risk assets' and holding cash for protection has been the wrong strategy for almost a decade.

This week's White Paper by MFS Investment Management called 'Emphasize the essentials' takes a similar critical view of trying to forecast the unknowable, including:

"It's better to look at what makes companies unique - their competitive advantages, ability to generate free cash flow and intellectual property - than it is to guess whether their cost of capital will decline by 25 basis points."

Graham Hand, Managing Editor

 

For a PDF version of this week’s newsletter articles, click here.

 


 

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