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Head of Short Term Investments and Global Credit Tony Togher discusses negative interest rates in Australia, the ongoing role of cash in portfolios and gives insight into how the largest cash manager in Australia continues to add value when rates are low.
AlbaCore Capital Group is one of Europe’s leading alternative credit specialists, investing in private capital solutions, opportunistic and dislocated credit, CLOs, and structured products.
As shareholders question ESG practices more than ever before, we spoke to our clients about how they are thinking about ESG when managing their funds. From reducing emissions to corporate culture and ESG risk assessments, the conversation highlighted the industry’s approach is not uniform but we are all grappling with the same issues.
Global investment manager, First Sentier Investors, today announced changes to its investment capabilities within Australia.
Find out more about our short term investment cash funds today. They aim to provide a regular income from investments in money market securities.
The Novel Coronavirus (COVID-19) pandemic has seen most financial assets sell-off across the board, including securities in the traditionally defensive listed property sector, as investors grapple with how the drastic government and central bank responses to the crisis will augur for property landlords in the shorter term.
The First Sentier Wholesale Strategic Cash Fund (‘the Fund’) reported a positive return (0.0032 or 0.32%, gross of fees) for the month of October 2022. This result was a welcome development following the low interest rate environment of the last 2 years, which has seen cash as an asset class struggle to produce higher returns and gain interest. With inflation becoming a key focus globally, the Reserve Bank of Australia (RBA) has begun tightening monetary policy through hiking interest rates, which has seen increasingly positive prospective returns from cash portfolios. The Fund maintains ample liquidity and is well positioned to capitalise off of the current market conditions. This note will dive into the dominant factors driving performance as well as further detail of the investment team’s longstanding approach to managing the portfolio which remains unchanged.
Shares, bonds, and alternative asset classes tend to dominate media attention and headlines, but there's a forgotten asset class that underpins most investors’ portfolios: cash. Record low interest rates around the world saw cash fall out of favour with investors in recent years, but prospective returns from cash portfolios are now rising again owing to higher official interest rates in key regions. In this paper, Tony Togher, Head of Fixed Income, Short Term Investments and Global Credit, explains some of the different investments that fall under the category of 'cash', some of the risks to be aware of and, finally, outlines the investment case for cash.
With the support of MUFG Bank, Ltd., (MUFG Bank), First Sentier Investors has launched a private debt capability focused initially on loans to the renewable energy sector.
Learn about investing in fixed income today. First Sentier Investors' on-the-ground teams share investment ideas uncovered in developed and emerging markets.
APRA market communication on capital call expectations – 1 November, 2022
We are entering a new era. The year 2024 will be unpredictable and clouded by many uncertainties. It will be marked by geopolitical risks, the ongoing taming of the inflation beast, and how the US Presidential election will impact markets.
Investing in Asian Fixed Income offers the potential for strong returns, an attractive income stream and diversification benefits versus developed markets.
While the wild swings in share, credit, currency, and commodity markets have garnered most of the attention in the months following the COVID-19 outbreak, cash markets in Australia have seen some highly unusual movements that demand further scrutiny.
Global asset management group focused on providing high quality, long-term investment capabilities to clients. We bring together independent teams of active, specialist investors who share a common commitment to responsible investment principles.
People are are at the heart of our success as a leading global asset manager
First Sentier Investors, a leading global investment manager, has launched its first integrated Climate and Nature Report for 2024, bringing together nature-related considerations into existing climate reporting, and aligning its mandatory and voluntary climate reporting with its reporting obligations as adopters of the Taskforce on Nature Related Disclosures (TNFD) recommendations.
Credit portfolios with genuine Environmental Social and Governance (ESG) integration could be a canary in the coal mine for potentially difficult-to-quantify risks and opportunities, including those likely to stem from climate change and the energy transition. While governments globally move at different speeds to put in place net zero policies, ESG-focused credit investors are taking decisive, early action to reflect these factors in their portfolio allocations.
We crossed six US states meeting over 70 infrastructure management teams as well as customers and suppliers at three conferences. We visited three corporate head offices, several regulators and toured the country’s largest nuclear power plant.
At Realindex, our ongoing research is moving strongly into the area of natural language processing (NLP), and how AI tools can be used to generate alpha.
The latest reporting season demonstrated the pace of economic recovery in Australia, and painted a positive outlook for quality Australian companies. Below are some insights that investors may consider as they look at their Australian equities portfolios in 2021.
We pose the question – what if we could develop a way of predicting which companies are more likely to be suffering distress, and which were not? The idea contains three parts: A. Certain individual observations or metrics can separately tell us about stocks that might – in the near future – find themselves in trouble. B. If we combine enough of these metrics together – without overfitting – we can get synergy between the factors. C. If we build a smart model that is designed specifically to target corporate distress, then we can apply and refine the predictions from the metrics in a better way.
Head of Global Property Securities Stephen Hayes: Global city populations continue to grow, driven by urbanisation. The provision of housing for growing populations is a major challenge for many countries and cities. Adequate housing is a factor that influences a city’s mobility of labour, social wellbeing and commerce levels. Government housing policies are typically viewed holistically with policies covering social, private and rental housing. New supply is not always efficient and can be problematic particularly in densely populated cities.
It’s easy to follow the crowd into some of the world’s largest and most expensive companies. It’s much harder to invest with a contrarian focus on the metrics that really matter. Investing from a global universe of 15,000 stocks across Australian, Global and Emerging markets, Andrew Francis, Chief Executive of $32.2 billion investment firm RQI Investors, shares his learnings about the mistakes that weigh investors down in global markets and the unconventional yet telling data his team focus on.
This year’s August 2024 reporting season has concluded with most ASX-listed companies disclosing their profit results and guidance for the 2025 financial year ahead.
Australia has fewer homes per adult than most of the developed world. First Sentier Investors Head of Global Property Securities Stephen Hayes is joined by Stockland Development CEO Andrew Whitson to unpack the challenges in meeting Australia’s growing housing demand – and where growth may emerge next.
Public policy support for infrastructure investment to remain strong globally, especially for the replacement of aged infrastructure assets and buildout of renewables. Utilities are in the midst of a multi-decade structural growth story. But higher capex needs to be managed in the context of affordability, reliability and sustainability. Earnings likely to be more resilient than global equities, albeit growth tempered by higher debt costs and increased regulatory and political risks. We expect the asset class to deliver mid-single digit EBITDA, EPS and DPS1 growth over the next two years despite a potentially challenging economic backdrop.
Listed infrastructure has offered investors attractive risk-adjusted returns and lower correlations to traditional asset classes. This outcome has been achieved by providing effective downside protection during periods of equity market weakness.
Despite straddling two of the most disrupted years in living memory, the FY20-21 reporting season was overall very positive. In our analysis, around one-third of companies [that we cover] surprised us on the upside, around one-third delivered in line with expectation, and one-third were below expectation. Our investment approach focuses on selecting companies with strong return on equity and return on invested capital, and these companies delivered superior returns overall. We actually saw EPS grow by 26% over the previous corresponding period, and expect a further 20% growth in the financial year ahead. Put simply, investors in quality stocks were rewarded by strong performance through the reporting season. We were also pleased to see that overall, Australian companies have strong cashflow and balance sheets.
Concentration in equity markets has reached unprecedented levels. While this has driven remarkable returns for a narrow slice of the market, it raises critical questions about diversification, valuation, and risk for equity investors.
This final paper is somewhat shorter than the first two, and simply aims to look a little deeper into whether zombie firms appear in Realindex portfolios, and how a Quality factor acts as a repellent for these stocks. This is more important in Value-oriented portfolios as the potential appearance of lower quality “junk” firms, or even zombies, is higher here than in broader universes.
Our recent paper on Extreme Concentration focussed on the US (and so Developed Markets). This was the natural as the central issue of concentration was among the top 10 stocks in the US, among them, the “Magnificent 7”.
First Sentier Investors has today announced it will apply to list its first Exchange Traded Fund (ETF) on the ASX, the First Sentier Geared Australian Share Fund Complex ETF (The Fund, ASX: LEVR), which is expected to commence trading mid-May 2025.
Global listed infrastructure underperformed in 2023 owing to rising interest rates and a shift away from defensive assets. Relative valuations are now at compelling levels. Infrastructure assets are expected to see earnings growth in 2024 and beyond, aided by structural growth drivers.
Conventional wisdom suggests that value-style investments (‘Value’) outperform their growth-style (‘Growth’) counterparts during periods of higher inflation . But in a period of growing inflation and unprecedented conditions, we believe it is useful to test this assumption. This article outlines how Value investments have performed in 2021 and what might be in store for Value investors if inflation leads to higher interest rates.
2024 was a year marked by global inflation and economic growth concerns against a backdrop of worldwide elections. As we head into 2025, volatility will remain an enduring constant.
We recently spent a couple of weeks in the US and Canada, meeting with management teams from the railroads, utilities and energy midstream sectors, as well as with regulators. Below are some of our findings. We hope you find them interesting.
The listed infrastructure sector in North America contains many world leading assets, operated by world class companies - and it's growing - with over US$50 billion in assets being added to the asset class.
2024 was a good year for global listed infrastructure. Strong earnings for energy midstream and a step-change in the earnings growth outlook for utilities helped the asset class to shrug off rising bond yields and political uncertainty.
The energy crisis in Europe has boosted global demand for LNG. Global listed infrastructure companies pioneered the US LNG industry, investing US$50 billion since 2010. The energy crisis is providing an opportunity for LNG to secure its role as a transition fuel. With reliability and security of supply increasingly front of mind, US LNG exporters stand to gain market share, underpinning a further US$50 billion of investment over the next decade. An increased need for natural gas infrastructure will also benefit the broader North American midstream sector.
Corporate culture is a powerful dynamic in a company. It is the set of beliefs and attitudes about the way things are done, and so is a key component of many corporate functions.
Recently I attended the largest US utility conference, the 2024 Edison Electric Institute (EEI) Financial Conference, in Hollywood, Florida. I met with management teams from 26 regulated electric and gas utility companies.
Over the last decade the electricity sector has been at the forefront of decarbonisation, ahead of transport, industry and agriculture.
Concentration in equity markets has reached unprecedented levels, particularly in the United States. A select few mega-cap stocks, colloquially referred to as the "Magnificent 7," now dominate market indices, reflecting a convergence of technological innovation, speculative enthusiasm, and the allure of generative AI.
This Rmarkdown workbook steps through some of the modeling we have done in relation to assessing some of aspects of the ‘Your Future Your Super’ (YFYS) proposal by the Treasury. It is intended to be illustrative. The assumptions are general, and can be adjusted by the user.
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