Switch to global equities, says Threadneedle
With Australian interest rates likely to continue falling, investors should consider reallocating out of cash and into global equities, according to Threadneedle head of Australian distribution, David Chinnery.
"[Global equity] yields are competitive relative to cash, and valuation models suggest that stocks are cheap," he said.
Threadneedle head of global equities William Davies said well managed companies around the world have access to cheap debt.
"This means a lower cost of capital and a lower hurdle rate for new investments," Davies said.
He pointed to three thematics that are driving Threadneedle's current stock selection.
Firstly, the rise of the consumer class in emerging markets is creating opportunities for global brands such as Swatch, Davies said.
Secondly, shifts in the supply of gas and rising demand from Asian countries is benefiting British Gas Group, LyondellBasell and Dresser-Rand, he said.
Finally, product innovation is driving growth for companies such as Apple and eBay, Davies added.
"It's worth remembering we invest in companies - not economies or countries. Despite the challenging economic backdrop, there are strong companies with competitive franchises to be found and diligent stock-pickers will reap the rewards," Davies 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.
