April saw a bounce back in share markets after March was one of the worst months ever. Our portfolios continue to be positioned defensively and so only took a limited part in the bounce. Over the last year, our Tactical Growth fund is beating the Chant West median superannuation fund by 10%. In our direct
What’s our medium to long-term outlook on Australian banks? We are not positive on Australian banks in the medium term. Australian banks will have a time to shine again. That time is not while staring down the barrel of the highest unemployment rate seen since the Great Depression and an extended period of close to
Chant West finally released its returns for superannuation funds for last month. Our growth fund smashed the median fund by 9.4% in March, courtesy of our aggressive move out of shares at the end of January. Our other funds also considerably outperformed their benchmarks. Unlisted Assets And those results don’t include the “massaging” of unlisted asset
One of our most frequent investor questions is around our government bond holdings and the unique risks that low-interest rates present. Government (as opposed to corporate) bonds are typically a low-risk investment. However, there plenty of doomsayers for the government bond market calling for a bond Armageddon. And the doomsayers are (technically) correct that if
A lot of people think a model and a forecast are the same thing. They aren’t. They are very different and knowing when you can forecast, and when you can only model is a critical investing skill. Coronavirus forecasting is a testament to the difference – many elements can be modelled, very few can be
Nucleus Wealth’s Head of Investments Damien Klassen was recently featured on ausbiz TV with the inside word on many Superannuation funds not writing down their significant balances of unlisted assets, and the prisoners dilemma it causes. This is an issue Damien has written about extensively as of late and sees as a major issue for
March was one of the worst months ever for stock markets. As discussed in our January and February reports, our portfolios were positioned for this outcome. Given we can only hold blue-chip liquid assets with no shorting or derivatives, our performance was as good as we could have hoped: Our tactical funds ranged from down
Most superannuation funds, and especially industry funds have significant balances in unlisted assets. Many are telling you that these assets haven’t lost money, or are only down a little despite sharemarkets being down close to 30%. This gives rise to perverse incentives for superannuants: if you leave one of these funds now, you will get
MB Fund’s Head of Investments Damien Klassen was featured in a Fund Manager Q&A today with Livewire Markets focused on Nucleus having called the possibility of Coronavirus causing widespead crashes in January when there were just 400 cases. Livewire note what’s happened since: In just 9 weeks, those 400 cases have exploded to over 400,000
I don’t think performance fees help. Actually, I suspect performance fees probably do more harm than good. Reason 1: Work smarter not harder First, it is tough to incentivise people to be smarter. Numerous studies have shown that while bonuses make people work harder at simple tasks, they don’t make people smarter. Some even argue it makes people worse at
Chant West released its returns for superannuation funds for last month and a preview of the March massacre. Our funds beat the benchmarks by up to 3.7% in February. In March returns to date our funds look to be beating benchmarks by closer to 10%. We moved decisively into international cash and bonds at the
One factor I have been watching closely is the spread of the coronavirus through summer or tropical countries. For most of February, it appeared travellers brought COVID-19 to summer or tropical countries, but the spread within those countries was limited. That looks to be changing. The raw chart comparing the two still suggests a stark
For a few weeks in late January and early February, stock markets suspended belief. Pundits on every channel emerged, suggesting a small economic dip followed by a massive stimulus package meant it was time to bid expensive stocks even higher. Meanwhile, in the real world: Earnings growth had already stalled. Valuations had reached lofty heights
Last month we threw in the towel on share markets. This month share markets were the ones to throw in the towel. From our previous monthly report: Share valuations have not been this expensive since the tech wreck. Earnings growth is pretty close to zero. A supply shock is accruing in China. So is a
Don’t be fooled by the dividend yields that you might see for the major Australian banks. They are reflecting a rosy vision of the future that is far from certain, and in my view are a value trap. For those with superannuation investments (where Australian bank shares make up a large part of most funds),
About a month ago, I posted here about how to look at coronavirus statistics. At the time, it was all about early warning signs, ignoring China data and focussing on the rest of the world. That analysis worked well for highlighting the problem early and changing investment strategy in front of the herd. But that
Chris Martenson ran this chart on his podcast over the weekend, suggesting that Thailand may have just rebranded their COVID-19 cases. Chris has been very good on the outbreak, but on this one, I’m not convinced. Thailand is a key piece in the puzzle about whether COVID-19 can have a sustained outbreak in a tropical
As you may be aware, there have been significant falls in share markets over the last few days on the back of COVID-19 concerns. We have had concerned messages and calls from investors, and I wanted to give you more information. In our tactical portfolios, we manage the asset allocation for you. About a month
First, the news from China: At 04:00 on February 26, 31 provinces (autonomous regions and municipalities) and the Xinjiang Production and Construction Corps reported 433 new confirmed cases and 29 new deaths (26 in Hubei and 1 in Beijing, Heilongjiang, and Henan). 508 new suspected cases were added. On the same day, 2,750 new cases
COVID-19 has been an issue for weeks. The bond market realised it. Forex markets realised it. So don’t give me the “Italy changes everything” bullshit. And spare me your “black swan” nonsense*. The reality is that very little has changed with the growth of COVID-19 over the last few days. If we look only at
It would have been difficult to lose money in January. Bonds, Aussie shares, international shares, residential property, it seemed like every asset was marching higher. Our own funds were no exception, our tactical funds all outperforming benchmarks. But, by the end of the month, we had thrown in the towel. Share valuations have not been
First, the news from China: At 04:00 on February 23, 31 provinces (autonomous regions, municipalities) and the Xinjiang Production and Construction Corps reported 409 new confirmed cases, 150 new deaths (149 in Hubei and 1 in Hainan), and new suspected cases. 620 cases. On the same day, 1846 new cases were cured and discharged, 16758
When you have a lot of COVID-19 cases, is it because you have a poor hospital system? Or is it because you have a really good one. Cases: Versus hospital efficiency: Source: World Health Organisation For reference, Australia rates 32, US 44, China 144.
It all comes down to how you want to look at it. If you go with the Chinese data, then there is a miraculous straight-line recovery, new cases are falling every day outside of Hubei (helped by a definition change on 7 Feb): If you look at the rest of the world data, then the
In the last three years, Australian houses have gone from boom to bust and now back to boom again. I have written in the past about how crazy the property cycle is, and recently, a buying frenzy has pushed prices back toward previous highs. Many are calling the market up 10% over the next year,
A few weeks ago we posted this Property Calculator here for you all to test; we appreciated the feedback, much of which has been implemented We’re pleased to announce the official launch of our Australian Property Calculator. Read on for a brief breakdown of some of the features Calculator features: Your property forecast Step 1:
The data quality showing the spread of the coronavirus is poor. The data from the Hubei province (the origin of the virus) is still wildly different from the data from elsewhere and so we need to analyse the data in separate parts. While the numbers don’t look as bad when analysed this way, I note
There is a certain seductiveness to a bearish investment argument. The chance to appear like a rational actor in a crazy world. The opportunity to be able to say “I told you so” at a future date. The moral superiority of the cautious investor. The problem is stock markets usually go up. The world belongs
Hi all. We are looking for beta testers for a property calculator that compares investing in property to investing in shares or renting. The calculator is at https://nucleuswealth.com/property-calculator Let us know in the comments where you think we have gone wrong… Below is a post that will accompany the calculator once tested. Deep in the Australian
2019 was a banner year for investment returns. Our own funds performed well throughout the year, highlighted by our growth fund up 17.8%*. This puts it in the top 4 growth superannuation funds according to researcher Chant West: Other Nucleus funds also had significant gains, our International direct share portfolio led with 27.2% returns over
