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How to build your clients’ portfolios to meet their goals The unpredictable nature of markets means that advisers need to be pragmatic and measured in their approach to meeting their clients’ goals, ranging from building a house deposit and paying for education to generating a consistent retirement income while maintaining enough capital for aged care deposits. Whatever the goals, most advisers typically need to be able to preserve a certain level of capital for their clients, while also investing for long term growth or for stable income. An enhanced core-satellite approach to portfolio construction can offer a cost-efficient and measured way to target investment goals and manage market volatility. Download the complete paper or read the summary below: What is enhanced core-satellite investing? ...
Whether your goal is to build a house deposit, pay for education or create a retirement income, taking a measured approach to your investments can help. Most investors typically need to be able to preserve a certain level of capital, while also investing for long term growth or income. An enhanced core-satellite approach to building your investment portfolio can help you target your goals and manage market movements. Download the complete paper or read a summary below. What is enhanced core-satellite investing? Enhanced core-satellite investing is a two-pronged approach to portfolio construction, where the core is made up of passive exposures to major asset classes (mainly equities and fixed income) and the satellite investments are more opportunistic and designed to seek specific growth outcomes, sometimes at higher levels of risk. Satellite investments could be targeted ETFs, actively managed funds or investments in individual companies or real estate. Generally, the core might be 65-85% of the portfolio, depending on the investor’s goals, investment horizon and risk tolerance, while satellites tend to represent 15-35%[1]. ...
Investing has become a game of chicken in the eyes of some investors. Has COVID-19 become a buying opportunity? Have we seen the bottom, or is the worst yet to come? It’s hard to make any solid predictions in this unfamiliar territory – investment markets have experienced a health crisis rather than being undone by poor fundamentals, such as in the global financial crisis. Those investors looking for ideas could consider the following. Download the complete paper or read the summary below 1. The essentials Some sectors are largely able to continue normal operations, even in crisis situations. Humans still need basic supplies and services to live, meaning that consumer staples continue to see demand, while infrastructure such as energy suppliers or telecommunications continue to need to operate. In the current situation, telecommunications have been particularly essential with much of the population needing to work from home. Investors could look at an ETF like ETFS Global Core Infrastructure ETF (ASX code: CORE) to access global infrastructure. 2. Defensive assets ...
Investing has become a game of chicken in the eyes of some investors. Has COVID-19 become a buying opportunity? Have we seen the bottom, or is the worst yet to come? It’s hard to make any solid predictions in this unfamiliar territory – investment markets have experienced a health crisis rather than being undone by poor fundamentals, such as in the global financial crisis. The essentials, defensive assets and growth trends should be considered by advisers exploring the opportunities to tilt the satellite portion of their clients’ portfolios. Incorporating the essentials There are a number of areas which may benefit from the current situation – or if not benefit, then at least be largely able to continue normal operations. Companies in the consumer staples sector is an easy starting point. People need basic supplies to live and supermarkets like Coles and Woolworths continue to operate and have seen increased demand in these times. There are even pockets to consider in the consumer discretionary sector as people use lockdown to carry out home based activities or upgrade the technology they use to work from home. Infrastructure, such as railways, energy suppliers and telecommunications, is a sector that continues to operate in periods of volatility. These types of companies normally have monopolistic fee structures and have very high barriers to entry with predictable revenue streams. This means they aren’t expected to rise as much in good times but are less likely to be materially impacted in the bad times. In the current situation, telecommunications has benefitted from an increased dependence from a population working from home. An ETF like ETFS Global Core Infrastructure ETF (ASX code: CORE) can offer exposure to global infrastructure companies in a client portfolio. ...
This week's highlights U.S. and Australian equity markets finished up last week. Oil rebounded and technology stocks bounced (OOO and ATEC) were the top performers for the week, returning 14.7% and 10.8% respectively. Biotechnology fund CURE also had a strong week up 8% and Global TECH was up 7.9%. European markets dipped along with emerging markets as debt levels came into question, with NDIA down 8%. While precious metal Palladium (ETPMPD) was down 7.7% for the week. Total flows into domestically domiciled ETFs were $286m, while outflows totalled $172m. iShares Composite Bond ETF (IAF) saw the biggest inflows for the week, followed by QUAL and defensive strategies GOLD and BBUS. iShares Core Cash (BILL) saw the week’s biggest outflows. Bearish domestic fund BBOZ was the most traded fund for the week, followed by MSTR and VAS. ...
This week's highlights Equity markets were mixed last week. India funds (NDIA and IIND) were the top performers for the week, returning 8.4% and 6.1% respectively. European funds (ESTX and HEUR) as well as a range of active ETFs (IMPQ, INES and VVLU) were also amongst the top performers. Biotech (CURE) and healthcare (IXJ) funds were amongst the poorest performers amidst coronavirus-related volatility. Precious metals mostly declined last week with GOLD down 2.8% and palladium (ETPMPD) falling 4.6%. Oil remained volatile, but finished the week relatively unchanged. The Australian dollar traded above US65c before ending just above US64c. Total flows into domestically domiciled ETFs were $317m, while outflows totalled $76m. Cash fund AAA saw the biggest inflows for the week, followed by QUAL and a range of domestic equity funds (A200, IOZ and STW). Hedged MSCI World fund (IHWL) saw the week’s biggest outflows. Bearish domestic fund BBOZ was the most traded fund for the week, followed by VAS and bearish US fund BBUS. OOO saw above average volumes in-line with its flows. ...