FNArena’s Weekly Insights – November 18 2019

As we approach the final weeks of calendar year 2019, the global investment community remains as polarised as ever on what to expect next and how best to position portfolios.

According to industry consultant bfinance, large institutional investors globally and in Australia are increasingly opting for a lower risk portfolio positioning, preparing for the end of this cycle and seeking safety through ongoing diversification, including in non-listed assets.

A number of technical-oriented experts on the other hand remain confident equities are set-up for an end-of-year rally, as is usually the case. Market researchers at ANZ Bank published research this week offering further support to this view. For equities, points out the ANZ Bank team, Santa Claus comes bearing gifts more often than not.

On ANZ Bank’s historical analysis, Australian equity indices finish the annual holiday period higher no less than 75% of times from where they started it. Their analysis has extended into related currencies and here the picture/correlation seems less clear. The Kiwi dollar (NZD) tends to benefit from the upward bias in equity markets into year-end, but not so much the AUD.

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