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
November was a stark reminder of the power of narrative in driving returns. World stock markets rose almost 5%, but earnings broadly were downgraded. Our portfolios handily beat all benchmarks over the quarter as our exposure to international stocks offset our large cash holdings. We have been trying to keep enough exposure to international stocks
The purpose of this Infographic is to debunk the common misconception that a switch to Electric Vehicles will hugely increase demand for electricity. This Infographic breaks down and depicts the data that it won’t, and in turn, Electric Vehicles will not save Coal as many suggest is might. The resulting effect is that Oil has
Every quarter I like to look at the changes in Australian GDP and which categories are responsible for the growth / decline. Each bubble represents a category of GDP proportionate to its size, colours represent the growth rate. Click the charts for a large version and commentary: This quarter the key takeaways include: Federal Government
There is an investing narrative that suggests with three interest rate cuts in the past few months, companies are about to unleash a capex spending spree. I’m skeptical. Yesterday’s capex data, which surveys both past and future company capital expenditure, supports my skepticism. I need to preface all of this with the observation (raised before)
October saw investment returns for equity markets higher yet again, the bigger story was a reversal in the bond market. Our tactical investment funds have performed better than most superannuation and investment funds over the year. In October the funds gave back some of the lead we have built up. Outperformance in our international fund
Ethical investment inflows have doubled in 2019. But, the Wall Street Journal highlights a problem near to my heart: ethical investing is not the same to everyone. Funds with a focus on socially responsible investing are enjoying a record year of inflows. But many such portfolios aren’t as clean as investors might expect. Eight of
This is a message for those who want to avoid being ripped off by aspire to be investment bankers. One dirty secret (of many) in investment banking is valuations are an advertising tool. If you can’t manipulate valuations to get the number your boss wants you to get, you are in the wrong game. How else can
I’ve written a few times recently about the imbalances in the Australian economy and how messed up the Australian housing cycle is. It looks as if the Australian economy is hanging on to positive growth based on one factor. Without that factor, there is significant economic downside. The one economic question that matters: Can rising
September saw volatile, but ultimately strong equity markets push the investment returns for most superannuation funds higher. Our tactical investment funds performed well, and continue to post-investment returns above the returns of most Australian super funds over the last year. This comes despite their defensive stance. In our portfolios, we are positioned for adverse outcomes,
The World Economic Forum just posted its most recent Global Competitiveness index. I don’t agree with some of the underlying measurements, but I find the depth and transparency into their process excellent – if you are wondering how they got to a score then the answer is probably available. Very useful when looking at which
Treasurer Josh Frydenberg announced Monday an ACCC investigation into the banks not passing on interest rate cuts. I think the investigation will make a nice addition to ACCC’s bookshelf. They can file it next Rudd’s FuelWatch and Grocery Code of Conduct. The biggest question is whether the investigation is designed to be a distraction from
Part of my investment thesis on China is that the underlying structural issues have been laid bare by the trade war. Regardless of any face-saving deal, the problems will not go away. China’s reactions to three events in the past week appear increasingly unhinged and are likely to accelerate the process. Background China entered the
Bloomberg just published another stark reminder of the shifting landscape for energy generation – fossil fuels have a limited time as viable sources of energy. And I’m not talking about saving the planet or carbon taxes, simply economics. Coal, gas, oil, all have economics based on a scarcity curve: the more we use, the deeper
Most superannuation funds lost money in August on the back of the Australian stock market, falling around 2%. Our tactical funds all bucked the trend to increase in August on the back of our overweight bonds and heavily underweight Australian stocks holdings: In our portfolios, we are positioned for adverse outcomes, which means that we
With decent investment yields increasingly hard to find, it is important to avoid yield traps when looking for alternatives to increasingly expensive bonds. Looking beyond the headline yield is critical to avoid the pitfalls: sustainability of yield, adjusting for capital expenditure, incorporating buybacks and analysing cyclicality of earnings can all help. MSCI came out with a
WeWork put its Initial Public Offering on ice this week as the company realised it would not be valued at the $47 billion that WeWork wanted. Indications are that WeWork would struggle to raise money with a $15 billion valuation. The process WeWork took to get a $47 billion valuation is instructive for anyone with
Some welcome news for LNG producers as the spike in the oil price flows through to the gas price for many Australian producers due to contracts struck over a decade ago. However, it is a short term gain only, the LNG market is highly competitive and only going to get more competitive going forward –
First, I need to set the scene. I wrote recently about how messed up the Australian economic cycle is, noting that housing booms come in several different flavours. Australia had a credit-driven housing boom from 2012 to 2017, and those types of boom/bust cycles usually have the following elements: This is not the
Farmers of seasonal crops are at the whims of the weather. Despite the work and effort put into ploughing and seeding the field, the harvest is, in the end, dependent on the outcome of the weather which delivers feast or famine years. Value investing (the process of buying stocks that are priced the cheapest) has
July added another month of good performance to the share and bond market rallies that have driven markets higher throughout 2019. Our tactical portfolios continue to perform well vs other super funds: The issue we are facing in most of our portfolios is that we are positioned for negative outcomes, which means that we tend
Via Bill Evans of Westpac: The Reserve Bank Board meets on August 6 to consider whether to extend the sequence of rate cuts in June and July for another month. We think it is quite unlikely that the Board will decide to do a third consecutive cut at this meeting. Following the cut in July,
Putting a portfolio together sometimes feels like catching waves: you position the portfolio for a number of themes, wait for the right wave to lift the performance, and then readjust your positioning for the next wave. The 2019 year to June was one such year with all of our tactical portfolios picking the right swell
In todays LIVE webinar (12:30pm AEST, Thursday 18th July), hear from MB Fund’s Head of Investment, Damien Klassen and Tim Fuller as we have a look at: The latest stats from Australian SMSFs and where they are currently invested 2 major mistakes SMSF trustees make in asset allocation Some key ways to avoid making these
The rip higher in bond prices meant that our asset allocation portfolios outperformed the median super fund substantially in May – three of our four tactical funds beat the median fund by over 1% in the month: The bond movement though leaves us at an impasse. Bond markets are pricing disaster, equity markets are pricing
The Australian housing market is crazy. Plenty of pundits are calling for the bottom of the current housing downturn now that a “house price friendly” federal government has been elected but there is little recognition of how messed up the current cycle is and why that makes any sort of forecasting extremely unreliable. A Typical
Independent Investment Research recently released a report into the fund underlying the MB Growth fund and rated it Recommended. Some of the highlights: Recommendation IIR ascribes a “RECOMMENDED” rating to the Nucleus Tactical Growth model portfolio. While the track record is relatively short, IIR views the quantum and pattern of performance as being consistent with
We are closing in on two years of running client money for the MB fund and we have hit a number of funds under management targets at Praemium which unlocks lower administration costs. We are passing all of the cost savings on to investors. Some of the added benefits: Lower administration cost. Platform administration costs
My day job is a mix of quantitative and fundamental investment analysis. What that essentially means is that I spend my time looking for situations where the numbers don’t match the narrative – and I can’t help but notice that in the Australian Federal election result the narrative and the numbers are miles apart. Scott
