Global equities hold surprises for savvy investors
Australians are highly allocated to local equities and need to re-evaluate the opportunities that exist on the global market.
Threadneedle chief investment officer Mark Burgess described the current macro economic backdrop as 'awful', spurred on by record levels of debt and 'anaemic' growth.
Despite this, low interest rates over the medium term mean high yield assets are performing well amid the ongoing Eurozone crisis, the US fiscal cliff and a slowdown in China's economic growth, he said.
"If investors want to get a good return, they're going to have to look outside of core bond markets," Burgess said.
Over rolling three-year periods, equity income strategies have outperformed every year during the last 20 years, according to SG Cross Asset Research.
Other than sectors like financials and industrials, there are limited equity income opportunities in Australia when compared to the rest of the world, Threadneedle head of global equities William Davies said.
From an institutional perspective, superannuation funds will also need to take a more global approach to equity investing, Threadneedle Australia head of distribution David Chinnery added.
"The theme we've seen over the past four to five years has been a greater allocation offshore," he said.
"Over allocation to Australian equities will most likely cease in favour of the more holistic approach to equities," Chinnery said.
Recommended for you
The possibility of a private credit ETF is looking unlikely for now with US vehicles seeing limited uptake, according to commentators, but fixed income alternatives exist that can provide investors with a similar return.
Ahead of the approaching end of the financial year, State Street has shared five tips for advisers who are using ETFs in their client portfolios.
The use of active ETFs in model portfolios by financial advisers is a key factor in the growth of the products for iShares, according to BlackRock.
Global asset manager BlackRock has identified bringing private markets to the wealth channel as a key business area for the firm that could generate US$500 million in revenue in the future.
