|
10k Words Equitable Investors April 2024 Bond demand on the slide as inflation expectations climb and the equity risk premium hits a multi-decade low, with the correlation between equities and bond yields turning more negative. The largest stocks continue to crowd out the market. Over in Japan the key equities index has finally returned to its pre-1990 peak. More listed equity is being bought back than issued as IPO activity remains stagnant. Finally we look at shifting volatility and benchmark returns for the March quarter. Biggest monthly drop in Fund Manager Survey bond allocation since July 2003
Source: Bank of America Global Fund Manager Survey Market implied US inflation over the next five years
Source: Bloomberg, @lisaabramowicz1 US equity risk premium at a 22 year low
Source: Bloomberg Rolling 2-month correlation between US equities & 10-year bond yields
Source: Morgan Stanley Research via @Schuldensuehner Market cap of the largest stock relative to the 75th percentile stock
Source: @LanceRoberts, RIAAdvisors.com Small cap stocks <4% of US equity market
Source: KobeissiLetter (data from CRSP, The University of Chicago Booth School of Business, Jefferies) Japan's Nikkei 225 finally recovers to its 1999 record
Source: Equitable Investors, Koyfin Net share issuance by companies on MSCI All Country World Index, adjusted for price and currency changes ($US billion)
Source: Financial Times Global IPOs by quarter
Source: WSJ, Dealogic Changes in US bond volatility (MOVE, RHS) v US equity (VIX, LHS) & Aus equity (ASX 200 VIX, LHS)
Source: Iress, Equitable Investors Volatility benchmarks v average since July 2021 and move last week
Source: Iress, Equitable Investors March Quarter (3 months) performance of key benchmarks and our "FIT" universe of ASX micro-to-mid caps Source: Iress, GuruFocus, Equitable Investors April 2024 Edition Funds operated by this manager: Equitable Investors Dragonfly Fund Disclaimer Past performance is not a reliable indicator of future performance. Fund returns are quoted net of all fees, expenses and accrued performance fees. Delivery of this report to a recipient should not be relied on as a representation that there has been no change since the preparation date in the affairs or financial condition of the Fund or the Trustee; or that the information contained in this report remains accurate or complete at any time after the preparation date. Equitable Investors Pty Ltd (EI) does not guarantee or make any representation or warranty as to the accuracy or completeness of the information in this report. To the extent permitted by law, EI disclaims all liability that may otherwise arise due to any information in this report being inaccurate or information being omitted. This report does not take into account the particular investment objectives, financial situation and needs of potential investors. Before making a decision to invest in the Fund the recipient should obtain professional advice. This report does not purport to contain all the information that the recipient may require to evaluate a possible investment in the Fund. The recipient should conduct their own independent analysis of the Fund and refer to the current Information Memorandum, which is available from EI. |
