FNArena’s Weekly Insights – November 07 2022
In this week’s Weekly Insights:
-More Choice For Income Hunters
-December Index Review Preview
-Conviction Calls
-AIA Investor Day In Sydney
By Rudi Filapek-Vandyck, Editor FNArena
More Choice For Income Hunters
The year of the Grand Yields Reset, otherwise known as probably the worst bear market for global bonds – ever, is starting to deliver investors genuine alternatives for regular income outside the share market.
This is a major change from recent years when a common phrase used on Wall Street was that of TINA – There Is No Alternative.
Increasingly, asset allocators and strategists are again warming towards government bonds and even cash deposits as implied returns (through income) have become competitive with stocks, and at a much lower risk profile.
Investors are being reminded that economic recessions, expected in the year ahead, bring along a lot of uncertainty for corporate profits and valuations, which, all else remaining equal, lifts the overall risks for individual companies, and their dividends.
Bonds traditionally benefit from tougher economic conditions, with both inflation and central bank tightening expected to change course over the year ahead.
A recent strategy update by Wilsons highlighted several fixed income alternatives investors might consider as a lower-risk option for their non-active cash on the sideline, including:
-JCB Active Bond Fund (CHN0005AU)
-Western Asset Australia Bond Fund (SSB0122AU, BNDS)
-iShares Core Composite Bond ETF (IAF)
-Floating rate hybrids
