Value investing, which involves buying beaten up and unloved stocks, has underperformed for years now. With central banks keeping interest rates low and global technology giants on a tear, growth stocks have thoroughly outperformed. But are things about to change?
Steepening yield curve may mean a higher discount rate
The yield curve has steepened sharply in recent months, as investors take stock of the coronavirus vaccine rollout and weigh fears that Biden’s stimulus package could trigger inflation.
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To access the 'No retirement for investments' white paper, please click the download now button above.
Important notice: a previous version of this whitepaper incorrectly stated the ASFA comfortable retirement standards for a couple as $43,787/year and superannuation balance of $545,000. These figures relate to the comfortable retirement standards of a single not a couple. The standards for a couple are $61,786/year and $640,000 in superannuation balance.
Managing a retirement portfolio for income and growth
Retirement portfolios offer a particular challenge in advice, given their more complex needs. They need to generate a stable income, preserve capital and still offer some level of growth to allow investors to manage inflation and longevity risks, along with a reasonable standard of lifestyle.
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Key Takeaways
Recent market volatility has encouraged investors to position portfolios more defensively
ETF Securities has a selection of products more suited to a defensive strategy
ZYUS gives a low volatility approach to the US market
CORE gives exposure to the historically more stable infrastructure sector
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ETFS Trade idea: US Defensive Equities Starting to Look Well Valued
ETFS S&P 500 High Yield Low Volatility ETF ASX Code: ZYUS
U.S. market has been high growth since Trump’s election
This cycle looks like it may be turning
Investors wanting to retain U.S. exposure but remove the high growth/high volatility companies should look at ZYUS
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ETFSTrade idea – Conflicting signals in the U.S. - Time for caution?
ETFS S&P 500 High Yield Low Volatility ETF (ZYUS)
ETFS Physical U.S. Dollar ETF (ZUSD)
The U.S. economy continues to surprise to the upside with
markets rebounding strongly.
Yet rising inflation, subdued long-term rates and geo-political
risks remain a concern.
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Is AUD/USD risk on the downside?
ETFS S&P 500 High Yield Low Volatility ETF (ZYUS)
Key Teakeaways:
The AUD/USD exchange rate is currently close to 2 year highs, at just below US 80c.
US rate expectations pulled back in July as political developments have cast uncertainty over the pace of US reforms and growth.
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