Retirees beware of rising rates, inflation
Retirees and investors should consider rising interest rates and inflation, investment management firm, DNR Capital warned.
The firm said it would be underweight the four major banks, property and Telstra.
According to DNR Capital’s portfolio manager, Scott Kelly, the recent support for bonds would be a short-term bounce and bond yields would probably bottom out.
As far as the banks were concerned, DNR said that although they might benefit from higher interest rates, there would be several “risks and headwinds” which would include the new levy, elevated housing prices, credit growth, bad debt normalisation and further capital requirements.
On the other hand, real estate investment trusts (REITs) valuations looked expensive, with a challenging growth outlook, particularly in the retail space, due to the prospective arrival of Amazon.
DNR also believed that Telstra would face long-term structural challenges, including increased competition for its mobile business, and expected that the firm’s dividend would be closer to 25 cents per share rather than 30 cents per share.
According to the firm, quality alternative companies for investors seeking income included Aurizon, Caltex and Henderson Group.
Commenting on Henderson Group, Kelly said: “The group’s merger with Janus will provide enhanced diversification, scale and distribution capabilities.
“In addition, there are a number of potential positive near-term catalysts for Henderson, including additional synergies, a rebound in European inflows and a recovery in performance fees off historical lows,” he said.
AUTHOR
Oksana Patron
Recommended for you
Schroders has appointed a new chief executive as Simon Doyle steps down from the asset manager after 22 years.
Distribution of private credit funds through advised channels to retail investors will be an ASIC priority for 2026 as it releases the results of its thematic fund surveillance and guidance for research houses.
State Street Investment Management has taken a minority stake in private market secondaries manager Coller Capital with the pair set to collaborate on broaden each firm’s reach and drive innovation.
BlackRock Australia plans to launch a Bitcoin ETF later this month, wrapping the firm’s US-listed version which is US$85 billion in size.
