Sat, Mar 28, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Australian bonds offer safe haven during financial crisis while their savers switch to self-managed pension pools

Thursday, July 26, 2012

Beverly Chandler, Opalesque London: Melbourne, Australia headquartered investment researchers Zenith Investment Partners’ Alternative Review reflects that in these troubled times, countries with apparently low risk of default - such as Australia - are seeing their 10 year bonds on a glide path to zero, while the 10 year yields on Italian or Spanish equivalents are doing the other thing.

Zenith’s Daniel Liptak quotes Fulcrum’s Gavin Davies who ascribes this phenomenon, not to central bank management or quantitative easing but by investors, driven by fear, who are buying bonds with perceived negligible risk as insurance.

Liptak’s view is that bonds in strong economies may be expensive and equities may be cheap for some time to come. "The recently announced low inflation rates reported in Australia should add downward pressure on RBA interest rate targets and consequently a negative for the Aussie" Liptak writes.

"We are inclined to continue USD credit in many flavours, paying for it through shorting the AUD. We are cautiously exploring methods to capture exposure in distressed European credits. While corporate balance sheets are on the whole healthy, we are not rushing into event driven strategies - given the macro risks, we believes most CEOs and their advisors will be more inclined to sit on their cash balances rather than increase M & A activity which we would expect to occur in more normal environments."

In another development in the Australian superannuat......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. Other Voices: The role of diversification in CTA portfolios[more]

    2014 brought a resurgence of managed futures strategies, or CTAs, which performed very well as a whole, outperforming all other hedge fund strategies. However, a closer look reveals that there was a wide range of performance, or return dispersion, across managers. The bottom line? Not all CTAs

  4. Neuberger Berman unit buys 20% stake in activist hedge fund Jana Partners for $2bn[more]

    Komfie Manalo, Opalesque Asia: Neuberger Berman’s unit Dyal Capital Partners bought a 20% stake in activist hedge fund firm Jana Partners worth $2bn, WSJ.com reports. The deal comes as activi

  5. Hedge fund launches fall again, $1bn funds found to outperform even smaller hedge funds[more]

    Komfie Manalo, Opalesque Asia: The number of new hedge fund launches fell again in 2014, the third consecutive year of decline, while fund liquidations saw their first drop since 2010, according to the latest HFR Market Microstructure Industry Report released by industry data provider HFR. Acc

 

banner