Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Eaton Vance Monthly Market Monitor
Embracing technology to improve profitability
Net Wealth released their latest Adviser Tech white paper, once again exposing the slow adoption of technology in by financial advisers around the country. The report details the many new outsourcing and digital applications available to make advisers jobs easier, yet the industry remains hamstrung by the requirements of other third parties. Interestingly, Net Wealth’s Advicetech ‘Stars’ averaged a score of 72 out of 100 and the average advice practice just 58. The data on page five is quite useful, showing the many types of technology available from CRM and Portfolio Management systems like XPLAN, to risk profiling and client questionnaires like Astute Wheel. The extensive list alone suggests that there are too many individual tech platforms and no ‘platform to rule them all’ that suits more advisers. You can access the full white paper here
A summer of fear and greed
Global fund manager Amundi released their latest monthly update, with its always prescient comments. The French group offers a European counter point to traditional US-focused economic and market outlooks. Group CIO, Pascal Blanque, highlights the tiring global market rally and the seemingly underappreciated risk that a vaccine isn’t found soon enough. Importantly, they see opportunities in Europe vs. the US, due to the slower recovery, and believe investors should be adjusting equity allocations between sectors, not necessarily cutting just yet. The fixed income team believe there is growing value in emerging market debt and are preparing to increase cyclical equity allocations. The full report can be found here.
Monthly Market Monitor
Global ESG leader Eaton Vance released their latest Monthly Market Monitor, a useful insight into the events of 2020 and outlook for the future; but with a focus on the visual, packed full of charts. The insights spread across fixed income, equity and alternatives markets with some of my highlights including:
- US High Yield spreads are well of their highs at 4.7%, but well off the lows of 2.41% occurring in 2007, suggesting the Fed’s bond buying is working but may be hiding more default risk than they realise.
- Yields on equities around the world are continuing to head lower, with the Europe and the UK highest at 2.9% after peaking in 2019, potentially a precursor for further cuts in Australia.
- Equity valuations around the world, on the most part are below 10 year averages, with the US the standout. More closely focused on the S&P 500, most sectors outside of consumer discretionary are actually sitting around average.
- The value of alternative assets has been reiterated once again with a 25% allocation to a traditional balanced portfolio improving returns but most importantly minimising the impact of recent falls.
The full report can be found here
