Mason Stevens | A Truly Universal Investment Offering

Private Credit – The End of the Golden Run?

30 May 2025 | By Andrew Ash – Head of Manager Research

READ TIME 5 mins READ MORE

The Australian private credit market has continued to expand substantially, with estimates placing its value at approximately AUD $205 billion. We have seen a rapid growth in the number of domestic managers offering private credit funds, while many of the...

Liberation Day – assessing the damage

03 Apr 2025 | By Jacqueline Fernley – Chief Investment Officer

READ TIME 5 mins READ MORE

Conclusion up front: Although there is room for discussions, it seems likely that US effective tariffs, even after negotiations, are likely to rise to ~20-25% (vs ~3% in '23). This returns US beyond levels of Smoot-Hawley Act that meaningfully disrupted...

Is it time for a rebound in Property and Infrastructure?

26 Sep 2024 | By Andrew Ash – Head of Manager Research

READ TIME 6 mins READ MORE

It has been a tough five years for both listed and unlisted Property and Infrastructure markets. The spike in inflation coming out of the pandemic and the subsequent steep interest rate hiking cycle led to a historically deep bear market...

Hybrids Become Topical Once Again

12 Sep 2024 | By Lloyd Mitchell – Head of Fixed Income & Markets

READ TIME 6 mins READ MORE

Since our last relative value note, spreads have continued to compress in Australian listed bank hybrids. This is largely due to a lack of supply and increase of investors allocating to fixed income. Whilst spreads are compressing, many investors are...

Australian Equities – The Challenge of both Beta and Alpha

30 Jul 2024 | By Andrew Ash – Head of Manager Research

READ TIME 5 mins READ MORE

Over the past decade, Australian equities have delivered a solid, if slightly underwhelming absolute return of 7.67% p.a.1 What has been particularly noticeable, however, is the large underperformance when compared to international equities which have returned 13.09% p.a. 2 over...

Strategies for growing and scaling your wealth management business

22 Jul 2024 | By Mason Stevens

READ TIME 3 mins READ MORE

The landscape of wealth management is undergoing a significant transformation, with an increasing focus on servicing High Net Worth (HNW) clients. As financial advisers and wealth management businesses look to grow and scale, understanding and addressing the unique needs of...

A growth engine for your wealth practice

27 Jun 2024 | By Mason Stevens

READ TIME 3 mins READ MORE

With the evolving role of financial platforms and their growing impact on wealth practices, Tim Yule, our CEO, shares insights on how platforms like Mason Stevens can transform the growth and efficiency of financial advice firms. Navigating the Financial Landscape:...

Video: Why now is the time for fixed income

25 Jun 2024 | By Lloyd Mitchell – Head of Fixed Income & Markets

READ TIME < 1 READ MORE

Staying ahead in the investment landscape is key for wealth practices who want to deliver strong returns for their clients, and in turn grow and scale their business. Learn how you can empower your wealth practice with our dynamic fixed...

Duration is back! Investing in Fixed Income

17 Jun 2024 | By Andrew Ash – Head of Manager Research

READ TIME 6 mins READ MORE

Duration is back In late 2011 the US 10-year bond yield went below 2% for the first time in the past 100 years, and for the next decade rarely got above that level, and indeed fell to around 0.50% during...

Hybrids: have they run too far?

28 May 2024 | By Lloyd Mitchell – Head of Fixed Income & Markets

READ TIME 6 mins READ MORE

Movement in spreads Hybrids (or ‘additional Tier 1’ ‘AT1’) as they are often referred to, sit at the bottom of a bank’s debt capital stack and one rung above common equity. They are designed to have characteristics of both debt...

How do you like your Alpha? Investing in International Equities

12 Apr 2024 | By Andrew Ash – Head of Manager Research

READ TIME 7 mins READ MORE

The Mason Stevens OCIO international equity sector review has just been completed. This was a focused review of who we believe to be the best managers in market across the international equity asset class. This review has in turn informed...

Growth Alternatives – the most challenging allocation

29 Nov 2023 | By Andrew Ash – Head of Manager Research

READ TIME 7 mins READ MORE

We are coming close to finalising our Growth Alternatives Sector Review and we thought it timely to share some of our thoughts and key considerations. This is arguably the most challenging sector across asset classes to review, and yet also...

Names we see flow in (EUR and USD)

27 Nov 2023 | By Lloyd Mitchell – Head of Fixed Income & Markets

READ TIME 7 mins READ MORE

Direct Bonds Activity & Flow As yields have increased, investors are looking more at Fixed Income to provide income and diversify their portfolio. With the many risks challenging the outlook for equities, higher yielding securities are proving attractive ways to...

Thematic ETFs

01 Nov 2023 | By Ian Weir – Senior Dealer

READ TIME < 1 READ MORE

Following on from the summaries of seven themes published at the start of September, we have continued exploring the broad topics below. Technological breakthroughs: Ongoing advancements in technology, such as artificial intelligence, robotics, and automation, will continue to disrupt industries...

Is now the REIT time to buy?

08 Sep 2023 | By Matthew O’Leary – Senior Fixed Income Analyst

READ TIME 6 mins READ MORE

A sharp rise in interest rates over the past year has seen many rate sensitive sectors decline in value with REITs being one of the hardest hit. As we approach the end of the rate hike cycle and bonds of...

Thematic ETFs

01 Sep 2023 | By Ian Weir – Senior Dealer

READ TIME 2 mins READ MORE

Thematic ETFs have gained considerable attention and popularity in the investment landscape, offering distinct advantages for investors seeking exposure to specific themes or sectors. These ETFs provide several benefits that make them attractive as investment options.

Names we see flow in

16 Aug 2023 | By Lloyd Mitchell – Head of Fixed Income & Markets

READ TIME 5 mins READ MORE

Fixed Income is continuing to gather increased attention from investors due to uncertainty in equity markets and bond yields reaching their highest levels in the last 10+ years. Some parts of the market have performed better than others in terms...

Private Credit – approaching an end of cycle test?

30 May 2023 | By Andrew Ash – Head of Manager Research

READ TIME 6 mins READ MORE

Private Credit has seen significant growth as an asset class in Australia over the past 5 years or so. Given this growth, and given where we are in the economic cycle, we thought it timely to conduct a review of...

Australian Federal Budget 2023/24

10 May 2023 | By Liam Montgomery - Dealer

READ TIME 3 mins READ MORE

Much of the Australian Federal Budget for 2023-24 had been leaked in the build up to last night’s formal release which resulted in a muted response to last night’s actual announcement.

1Q23 US earnings: Are rate hikes starting to bite?

08 May 2023 | By Ian Weir – Senior Dealer

READ TIME 3 mins READ MORE

As always, the quarterly US earnings reports are very closely watched for how the global economy is fairing. The combination of near full employment, higher than normal personal saving rates and an increased demand post the COVID 19 pandemic, theoretically...

What Sophisticated Investors Know & Love – RMBS

27 Apr 2023 | By Lloyd Mitchell – Head of Fixed Income & Markets

READ TIME 7 mins READ MORE

Australian RMBS is an extremely well performed asset class both in terms of credit performance, but also the return available for the credit risk taken. No tranche of an Australian RMBS has ever passed a loss to bondholders at any...

India: A significant underperformer YTD, where to from here…

19 Apr 2023 | By Ian Weir – Senior Dealer

READ TIME 5 mins READ MORE

When compared to other Equity Emerging Markets, India’s absolute and relative returns have stalled since late November 2022 as global investors have moved back into Technology focused markets such as Korea and Taiwan post China’s step change in their Covid...

Bank Debt- what we know and what we are familiar with

04 Apr 2023 | By Lloyd Mitchell – Head of Fixed Income & Markets

READ TIME 5 mins READ MORE

Banks and Insurers are funded by groups of distinct groups. The bondholders with the least chance of not being repaid should a bank get into difficulty are usually those earning the lowest returns and those with the highest likelihood of...

Aussie Earnings Wrap

10 Mar 2023 | By Liam Montgomery - Dealer

READ TIME 3 mins READ MORE

Heading into this past earnings season investors were curious to see if the rapid increase in rates by the RBA over the past 10months had finally started to take their toll on earnings, or if companies were still holding up...

RBA Kicked Off 2023 with a Hawkish Hike

08 Feb 2023 | By Lloyd Mitchell – Head of Fixed Income & Markets

READ TIME 2 mins READ MORE

As was largely expected the RBA yesterday decided to increase the cash rate to 3.35% with a 0.25% increase from their December meeting. There were a couple of key messages in the statement around inflation expectations and future rate hikes.

Let’s Fight the Fed!

02 Feb 2023 | By Mason Stevens

READ TIME 3 mins READ MORE

Early in the morning of 2 February Australian time the Fed raised the target Fed Funds rate by an expected 25 basis points to 4.50/4.75%. Chair Powell noted there was no reason for the Fed to differ from its guidance...

Rates are going further… for now

27 Jan 2023 | By Mason Stevens

READ TIME 3 mins READ MORE

Australian CPI is released monthly, and the annualised rate released on Wednesday 25 January was a truly shocking 8.4%. This series is very new and the ABS has decided that it will not be as comprehensive as the quarterly release...

U.S. debt pushing the limit

25 Jan 2023 | By Matthew O’Leary – Senior Fixed Income Analyst

READ TIME 4 mins READ MORE

The United States of America running at high levels of debt is nothing new, however COVID related fiscal policy has seen this balloon in the past few years to be at 123.6% of Nominal GDP(Sept 2022). The US has now...

Remember when inflation was out of control?

17 Jan 2023 | By Mason Stevens

READ TIME 4 mins READ MORE

The US Bond market rode a rollercoaster last month, starting down the road that leads to strong action by the Fed and doing a sharp U turn to price for a swift end to inflation as the key factor in...

2022 in review

12 Jan 2023 | By Jacqueline Fernley – Chief Investment Officer

READ TIME 4 mins READ MORE

2022 started with some major equity indices near their all-time highs and the vast majority of central banks entertaining record low interest rates. However, over the past 12 months, we have seen the geopolitical and economic landscape significantly change.

Same problem, different outcomes, a central bank primer

07 Dec 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

At its meeting on Tuesday 6 December, the RBA Board decided to increase the cash rate target by 25 basis points to 3.10 per cent. The continued mantra is that inflation in Australia is too high (6.9 per cent over...

APRA threw the cat amongst the pigeons

25 Nov 2022 | By Mason Stevens

READ TIME 3 mins READ MORE

On Melbourne Cup day APRA released a letter to authorised deposit-taking institutions (ADIs), general insurers and life insurers (together ‘insurers’) to reinforce the existing prudential requirements for additional Tier 1 capital or Tier 2 capital instruments. This letter was only...

Will lithium continue to charge on?

16 Nov 2022 | By Liam Montgomery - Dealer

READ TIME 4 mins READ MORE

Lithium has become one of the hottest topics over the past 18-24 months, with many listed lithium companies seeing meteoric rises in their share prices over this period. The supply and demand issues have been widely reported during this time,...

RBA versus the Fed, the worm has turned

08 Nov 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

In the last 30 years, Aussie interest rates have often been higher than US rates. Looking at the chart below, for the lion’s share of that time the Aussie 11am Cash Rate was significantly higher than the US Fed Funds...

RBA November rate hike

02 Nov 2022 | By Mason Stevens

READ TIME 3 mins READ MORE

At its meeting just before the Melbourne Cup, the RBA Board decided to increase the cash rate target by 25 basis points to 2.85 per cent. They noted that inflation in Australia is “too high” and yet retained their moderation...

The Budget: Learning lessons from the UK, but stormy seas ahead

28 Oct 2022 | By Ian Weir – Senior Dealer

READ TIME 4 mins READ MORE

Federal Treasurer Jim Chalmers delivered his first Budget to Parliament only five months after the Labour Party won the federal election. Inheriting an economy at close to full employment, high inflation and having watched the events of the UK post...

Inflation – the pump is still attached.

27 Oct 2022 | By Mason Stevens

READ TIME 3 mins READ MORE

The RBA may be rueing their decision to temper the pace of their rate hikes this month with a truly awful CPI release on 26 October. The tough news was CPI in the quarter hitting 1.8% and 7.3% annualised, both...

Be careful what you wish for…

07 Oct 2022 | By Ian Weir – Senior Dealer

READ TIME 4 mins READ MORE

In what has been one of the most uncertain periods for the United Kingdom for decades, volatility and uncertainly has taken a significant step up in the last few weeks.

The divergence in the consumer’s sentiment and their balance sheet

09 Sep 2022 | By Matthew O’Leary – Senior Fixed Income Analyst

READ TIME 5 mins READ MORE

With the post-pandemic bull market rally ending earlier this year, and as the economy moves to a tightening cycle, we are seeing a disparity between the consumer’s sentiment and their balance sheet. Consumer sentiment is at multi-year lows, yet household...

Yearnings for Earnings – Aussie Wrap

31 Aug 2022 | By Liam Montgomery - Dealer

READ TIME 4 mins READ MORE

We are nearing the end of the Aussie reporting season now, having seen over 80% of companies report (which makes up 90% of the market cap). Following on from the US earnings season last month, investors were interested to see...

Jackson Hole – not just a ski resort

26 Aug 2022 | By Mason Stevens

READ TIME 3 mins READ MORE

The Federal Reserve is made up of several regional Feds, and Kansas City plays a very key role in their calendar as it hosts the Jackson Hole Economic Policy Symposium (known simply as “Jackson Hole”). This annual event is the...

Oil…has the well gone dry?

17 Aug 2022 | By Ian Weir – Senior Dealer

READ TIME 4 mins READ MORE

It has been a perfect storm on both the demand and supply side for the oil market since late last year with Geo-political tension, supply chain issues and the re-emergence of business/leisure travel. As oil prices have fallen 30% from...

Inflation is Boring

11 Aug 2022 | By Mason Stevens

READ TIME 3 mins READ MORE

Google Trends is a highly unscientific tool to see what is important to people. Looking at the chart below it seems only a few of us were checking for latest inflationary developments before the Russian invasion of the Ukraine started...

Decentralised Crypto Lending Platforms: A new era in FinTech or a failed innovation?

08 Aug 2022 | By Thanh Nguyen

READ TIME 7 mins READ MORE

Innovation is critical and as a generation in the 21st century, we are lucky to witness the start of a new era of digital financial innovation. Over the past few years, we have seen a rapid evolution of different FinTech...

Hiking is no walk in the park, just ask the RBA

03 Aug 2022 | By Mason Stevens

READ TIME 3 mins READ MORE

For the second meeting in a row the Reserve Bank of Australia’s Board has raised the cash rate by 50 basis points, putting the cash rate now at 1.85%. We have had 1.75% of increases this year, the fastest pace...

Signposts from US earnings season

01 Aug 2022 | By Ian Weir – Senior Dealer

READ TIME 3 mins READ MORE

We are just over halfway through the most anticipated US earnings season for some time. The market has been desperate to get some real datapoints on how the US and to some extent the global consumer is travelling. Therefore now...

How to Tame Your (Inflation) Dragon

28 Jul 2022 | By Mason Stevens

READ TIME 3 mins READ MORE

Australian economists were pleasantly surprised when the June quarter CPI was released, and it was “only” 6.1%. The violent adjustment in bond yields, equity prices and sentiment that came along with that dragon jumping out of its cage earlier this...

Banking on Earnings Season

21 Jul 2022 | By Liam Montgomery - Dealer

READ TIME 4 mins READ MORE

Banks are regularly looked at as a barometer for economic expectations, with their earnings viewed as a key signpost to investors across the globe. This US reporting season is no different. With all eyes firmly on the banks to see...

Is the RBA keeping you awake at night?

20 Jul 2022 | By Mason Stevens

READ TIME 3 mins READ MORE

On Tuesday, 19th of July the minutes of the July RBA Board meeting that decided to raise the Cash Rate by 50 basis points was released. The Board said that it was absolutely determined to “withdraw some of the substantial...

How Inflation Changes Things

15 Jul 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

The biggest impact inflation has had is not the higher cost of gas for the American commuter or that steak is a once a fortnight not once a week family meal, but a quick unwinding of the “extraordinary” financial measures...

The departure of Boris Johnson & where to for the UK and Australia

11 Jul 2022 | By Ian Weir – Senior Dealer

READ TIME 3 mins READ MORE

Boris Johnson’s resignation last week opens the door for a Conservative leadership election over the coming weeks. The leadership issue has been an overhang for the last few months, therefore most would expect the party will look to move swiftly...

This time IS NOT different

04 Jul 2022 | By Jacqueline Fernley – Chief Investment Officer

READ TIME 5 mins READ MORE

I was reflecting on the speed of change in markets. If we think back to Covid - that was the quickest bear market we have ever seen. This half we have essentially seen the most material shift in the yield...

Too early to think about income? – Don’t let it get too late.

30 Jun 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

Investors who took the decision to de-risk their portfolio in 2021 by investing in fixed rate bonds have seen unwelcome revaluation losses in their portfolios. These transitionary “losses” are almost totally related to opportunity cost rather than any likelihood they...

Gold, a diamond in recession

24 Jun 2022 | By Liam Montgomery - Dealer

READ TIME 5 mins READ MORE

Markets have faced a troublesome few months, with uncertainty rising higher than it was earlier in the year. Central banks are now truly realising the magnitude of inflation that they are faced with, and with that we are almost seeing...

Cashing in on Carbon Credits

17 Jun 2022 | By Matthew O’Leary – Senior Fixed Income Analyst

READ TIME 3 mins READ MORE

Reducing overall emissions is one of the greatest issues facing individuals and governments globally. This is evident through a focus on ESG by investors, and governments creating a cost through carbon credits to internalise externalities. So, what are carbon credits...

Paying the Piper, Fed raises rates by 75 Basis points.

16 Jun 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

The people of Hamelin realised they had a rat problem but didn’t like the cost of the solution. On Wednesday (early Thursday a.m. our time), Jay Powell the Chair of the Federal Reserve Open Market Committee (FOMC) did the only...

Lowe-ring The Hammer On Inflation

09 Jun 2022 | By Mason Stevens

READ TIME 5 mins READ MORE

Tuesday’s shock announcement underscored what can be viewed as a pivotal turning point in the mentality and approach of the RBA, where the RBA has now transitioned into “inflation fighting mode” – seeking to “front load” rate hikes and chart...

Stablecoins: The Cost of Innovation

03 Jun 2022 | By Mason Stevens

READ TIME 7 mins READ MORE

The collapse of the Terra/Luna ecosystem has been a stain on the cryptocurrency industry for the past few weeks – supporting the arguments of many sceptics who talk of tulips, bubbles and the need for harsh and sweeping regulation. Whilst...

Time is Money

27 May 2022 | By Liam Montgomery - Dealer

READ TIME 4 mins READ MORE

Global equity markets experiencing a torrid time of late, down heavily since the turn of the year. This has seen plenty of investors look to try time the market by picking the bottom of the drop, or even selling too...

Mental Models Ought to Evolve with the Environment

24 May 2022 | By Jacqueline Fernley – Chief Investment Officer

READ TIME 5 mins READ MORE

"To be an investor is to live constantly at the intersection of story and uncertainty. We build our mental models, frameworks, and processes to try to accurately price securities and overlay them with a story about the economic, geopolitical, and...

Inflation Rages While Wages Stay Muted

20 May 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

Over the past two years, the focus on inflationary rhetoric has been primarily centred around the disruption of supply chains, and injections of fiscal and monetary stimulus. What has received less attention is the role of wages in the inflationary...

Active vs Passive Investing – The Rise of Passive Investing

16 May 2022 | By Matthew O’Leary – Senior Fixed Income Analyst

READ TIME 3 mins READ MORE

Investing has come a long way in the last 50 years, pioneered by an increase in access to information and access to trading platforms. One of the changes to come from this is a rise in the popularity of passive...

Let’s Get Political, Political!

11 May 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

Our next Federal election is to be held on 21/May, 10 days away, and pre-voting is already open. Domestic financial markets are looking at the election in two different ways; 1/ Both major parties are similar and the ultimate result...

Stagflation: Could Australia or Other Global Economies Experience This Unusual Event?

09 May 2022 | By Matthew O’Leary – Senior Fixed Income Analyst

READ TIME 4 mins READ MORE

Inflation has been very topical for months now and there is no doubt that its effects are being felt globally. The economy is experiencing robust yet falling growth, so could Central Bank tightening policies put a handbrake on economic growth...

Fed Fun(ds)

06 May 2022 | By Liam Montgomery - Dealer

READ TIME 5 mins READ MORE

Globally, inflation, as measured by CPI, is rising quite broadly, across most developed and emerging economies, and at an accelerating rate. As a result, central banks are being scrutinised more intensely as the “transitory” narrative of 2021 has been discarded,...

Soft Commodities Are On The Menu

02 May 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

Over the past few weeks, we’ve begun to revisit the real asset space – exploring exposures which offer uncorrelated, and real returns. Soft commodities, whilst vital to our existence, have historically played a bit-part role in investor portfolios – despite...

Q1 Inflation Comes in Hot

28 Apr 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

Yesterday the ABS published our domestic CPI data for Q1 and the result was an upside surprise, where inflation pressures surged above consensus expectations, and even further above previous RBA estimates. Today’s note details the underlying components seeing costs of...

US Banks – Reporting Season Review

26 Apr 2022 | By Liam Montgomery - Dealer

READ TIME 4 mins READ MORE

Global markets are currently stuck in an almighty game of tug of war, with many market participants holding disparate outlooks in the face of rising economic uncertainty, multi-decade high inflation prints, and the impending tightening of monetary policy from developed...

Gold – An Investment and an Indicator

22 Apr 2022 | By Matthew O’Leary – Senior Fixed Income Analyst

READ TIME 4 mins READ MORE

Gold has been used as a store of wealth since 700 BC when Lydian merchants began producing gold coins. Since then, the world has changed dramatically and with it, the utility of gold. Gold however, can still be used to...

Energy Sector Update

20 Apr 2022 | By Jacqueline Fernley – Chief Investment Officer

READ TIME 4 mins READ MORE

The Russian/Ukraine war, strong demand recovery, inflation and weak supply growth have all combined to contribute to significantly higher oil prices to date through CY2022. Consequently, one of the best performing equity sectors globally is unsurprisingly the Energy sector. In...

Real Assets, Real Opportunity

19 Apr 2022 | By Mason Stevens

READ TIME 5 mins READ MORE

In an environment where higher inflation is more sustained, protecting and then growing the purchasing power of capital becomes the focus of portfolio positioning. Equities are a claim on nominal growth and can therefore perform well in this environment, as...

The Importance of Twitter and Elon Musk’s Partnership

13 Apr 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

A hot topic of debate over the past few years has been the outsized controls which social media networks have on the dissemination of information, where the concept of “free speech” has been debated time and time again against the...

Asset allocation – Where to from here

11 Apr 2022 | By Jacqueline Fernley – Chief Investment Officer

READ TIME 3 mins READ MORE

As equity markets continue to broadly shrug off geopolitical turmoil, the same big picture debates are coming back to the fore, perhaps with a few minor tweaks. Are we in a mid-cycle slow down whereby central banks can adjust monetary...

Australian Cash Rate – What’s Priced In? Pt2

08 Apr 2022 | By Mason Stevens

READ TIME 5 mins READ MORE

In the month since we last detailed RBA cash rate expectations, a lot has happened where the market has raised rate hike expectations aggressively. Specifically, projecting a cash rate of 2.15% by year end, with over 2% of rate hikes...

Time in Possession

06 Apr 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

As an NFL enthusiast and Philadelphia Eagles fan, I’m well aware of the concept of “Time in Possession”, which is a statistic measuring the percentage of a game that a team’s offence has the ball. Time in possession isn’t necessarily...

The Impending Hunger Crisis

04 Apr 2022 | By Mason Stevens

READ TIME 7 mins READ MORE

Whilst financial markets have remained largely fixated on energy markets throughout the Russia-Ukraine crisis, an impending hunger crisis has been festering in the background which could have grave implications for the global economy, as well as on the health and...

Australian Federal Budget 2022/23

31 Mar 2022 | By Mason Stevens

READ TIME 7 mins READ MORE

On Tuesday evening, our Federal Budget for FY2022/23 was handed down and was definitely an election year Budget less concerned with fiscal consolidation than yesteryear. Windfalls from higher than forecast commodity prices boosted revenues, as did a quicker rebound in...

Russia-Ukraine Update

30 Mar 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

Today marks the 34th day since Russia’s invasion of Ukraine, where both sides have entered into a protracted stage of conflict where neither side has shown signs of being able to definitively secure victory in the short term. Global markets...

Talk of the R-Word and Yield Curve Inversion

25 Mar 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

The shape of the government bond yield curve is an incredibly powerful tool for determining the forward looking price of money. The shape – the relative flatness or steepness – can also be used as a gauge of inflation expectations,...

Embedding ESG Into AUD Fixed Income Portfolios

23 Mar 2022 | By Mason Stevens

READ TIME 7 mins READ MORE

Last week, I had the opportunity to speak at a portfolio management conference held by IMAP – Institute of Managed Account Professionals – on the topic of embedding ESG into fixed income portfolios, specifically, AUD fixed income portfolios. In today’s...

NFT’s: A Generational Innovation

21 Mar 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

The use cases of NFT’s will span far beyond the digital art and collectibles markets we see today, through their properties of being verifiably scarce, portable, and programmable digital assets. Their key values lie in being able to establish digital...

The Fed Walks a Fine Line

18 Mar 2022 | By Mason Stevens

READ TIME 5 mins READ MORE

Yesterday morning (in our time zone), the Federal Reserve raised their cash rate by 25bp to 0.25-0.5% p.a. What caught our eye was the more hawkish dot plot, where the median dot was higher than the market’s forecast, a hawkish...

Agriculture in a Bull Market

16 Mar 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

Agriculture exposure is something that is overlooked when constructing a portfolio, which is odd, when you consider that agriculture produces the food which everyone looks forward to at breakfast, lunch, and dinner. In Australia, agriculture contributes 3% (about $50 billion...

Equality All Year Round

14 Mar 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

Each year, International Women’s Day provides a strong reminder that we’re continually failing as a society to provide gender equality, considered by the United Nations to be a fundamental human right, but also a necessary condition for a peaceful and...

Australian Credit Bond Market Update

11 Mar 2022 | By Mason Stevens

READ TIME 5 mins READ MORE

Credit spreads have endured a difficult start to the year, widening on the back of the same forces driving most risk assets - interest rates and the Russia/Ukraine conflict. Whilst investment grade issuers remain well capitalised, rising interest rates have...

Cybersecurity Will Only Grow in Importance

07 Mar 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

The importance of cybersecurity has continued to grow as more and more of our lives are transferred to the digital realm. The threat of Russian cyber warfare, the Colonial Pipeline ransomware attack, and the SolarWinds hack have all demonstrated the...

The Australian Cash Rate – What’s Priced in?

04 Mar 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

Putting the topic of the Russia-Ukraine war aside for a day, higher and more sustained inflation is still front-and-centre for investment decision making this year, as well as the likely reaction function that central banks will have in dealing with...

Isolating Russia via SWIFT

02 Mar 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

Late last week and over the weekend, several nations joined forces to jointly sanction Russia for invading Ukraine. One of the latest sanctions was an economic restriction on specific Russian banking institutions from using the SWIFT electronic-payment-messaging system that forms...

Russia-Ukraine Update

28 Feb 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

Last Thursday morning (local time), Vladimir Putin launched a broad based Russian military offensive against Ukraine – starting what is by some measures the largest armed conflict in Europe since WW2. It has currently involved missile, air and artillery strikes...

Investing With Rising Interest Rates

23 Feb 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

The last 2-3 weeks have been overshadowed by geopolitical uncertainty regarding Russia-Ukraine unrest, whilst the spectre of higher bond yields and less financial market liquidity is continuing to influence markets. In the past 3 months we’ve seen what the prospect...

Sizing Investments Appropriately

21 Feb 2022 | By Mason Stevens

READ TIME 5 mins READ MORE

There are only two ways to size an investment. You make money and wish you bought more, or you lose money and wish you bought less. While being flippant, what we’re saying is that we invest and choose each position...

Copper Death Cross

17 Feb 2022 | By Mason Stevens

READ TIME 4 mins READ MORE

Copper has experienced a “death cross” price event, where short-term average price has declined below long-term average price levels. While this type of technical price indicator is lagging in nature, there’s only been 5 such events in the past 30...

The Implications of Conflict Between Russia-Ukraine

15 Feb 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

One of the most important news stories over the past few months has been the escalating Ukraine-Russia tension, where the threat of invasion has continued to linger over the world as negotiations continue to fall afoot of Russian demands. Uncertainty...

How to Get Exposure to Cryptocurrencies

14 Feb 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

The capacity to self-custody cryptocurrencies generates an immeasurable opportunity for current, and potential market participants. Through the removal of intermediaries, access to this section of capital markets is granted to anyone with a working internet connection, and some spare change....

SaaS: The 8th Wonder of the Financial World

10 Feb 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

SaaS (Software as a Service) businesses are one of the fastest growing segments within the IT industry, and have been one of the largest beneficiaries from the COVID-19 pandemic given the growing importance of flexible, affordable and cloud based technological...

Explaining Quantitative Tightening

09 Feb 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

Monetary policy is set to become less expansionary and accommodative this year, although not outright contractive, will provide less impetus for risk assets to continue their stellar performance of recent years. This year we must come to understand a new...

Role of Cryptocurrencies Within Portfolios

04 Feb 2022 | By Mason Stevens

READ TIME 8 mins READ MORE

Over the past two years cryptocurrencies have emerged from the fringes of capital markets to become regular talking points within asset allocation discussions. However, whilst the seemingly exponential growth of valuations over the past few years has been attractive enough...

The Current Equity to Bond Rotation

03 Feb 2022 | By Mason Stevens

READ TIME 5 mins READ MORE

The recent decline in many global share indexes has been largely attributable to lower valuations and investment outflows. These outflows where from industry sector to industry sector, from one nation’s index to another, and between asset classes as well as...

Going Against the Tide

02 Feb 2022 | By Mason Stevens

READ TIME 5 mins READ MORE

January has seen equity markets selloff considerably, in response to the expected acceleration in rate hike timelines and earlier than expected announcement of Quantitative Tightening (QT) in the US. Whilst this has seen the majority of shares decline, some sectors...

Since We’ve Been Gone

31 Jan 2022 | By Mason Stevens

READ TIME 6 mins READ MORE

Welcome back to the Mason Stevens morning note series. Since we left off in our last note on 10/Dec, quite a lot has happened and asset prices have moved somewhat, notably equity markets are off their 2021 highs. For our...

I Don’t Know You Yet

10 Dec 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

CY2021 like 2020 has yet again been dramatically influenced by COVID infection and hospitalisation rates, likely a year that flew by for most of us, and one with less memories that stand out, with less experiences to use as reference...

Multi-Asset Outlook for 2022

08 Dec 2021 | By Mason Stevens

READ TIME 10 mins READ MORE

Today’s note culminates our aggregate market outlook for 2022, where we summarise our views for the global macro-economy. CY2022 is likely to be a starkly different year to 2020 or 2021, where there were generally one to three main drivers...

Cryptocurrency Market Outlook 2022

07 Dec 2021 | By Mason Stevens

READ TIME 8 mins READ MORE

2021 has been a breakout year for cryptocurrencies, with its dramatic rise through the ranks of popular culture seeing the asset class move from the fringes of society, to a focal point within political and investment-based discussions. Despite this, the...

Fixed Income Outlook 2022

01 Dec 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

Fixed income assets are likely to be influenced by divergent forces in 2022, where COVID-19 variants and surging infection rates will elicit risk-off investing and the demand for safe haven assets such as bonds as well as specific currencies such...

Not So Super-annuation

26 Nov 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

For the everyday Australian, their superannuation account will be one of the most important investments of their lives, serving as a stable base to support their retirement. Given its importance to our lives, we should spend time dwelling on how...

Currency Outlook 2022

24 Nov 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

It's that time of the year where we start to aggregate our views to provide tactical positioning for the 2022 calendar year. I've elected to start off our "Outlook" notes series by tackling what I find to be the hardest...

Poetry, Geopolitics & Financial Markets

19 Nov 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Both geopolitics and investment management are about philosophy and strategy, where both incorporate at least some degree of forecasting or signalling of future events. Our considerations of the future and the way it relates to our present self is couched...

The Metaverse: Fad or Future?

17 Nov 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

The Metaverse has received significant press attention over the past few weeks on the back of Mark Zuckerberg’s announcement to change Facebook’s name to Meta. But what exactly is the Metaverse? The Metaverse can’t by defined by a location, or...

Weekend Reading | “It’s Five O’Clock Somewhere”

12 Nov 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Good afternoon and welcome to the Weekend Reading, Jesse style. I gave Max the day off today so that he could enjoy his birthday to its fullest extent…whilst the poor guy is in lockdown. As I’m a different person with...

To Fix or Not to Fix, Pt. 2

12 Nov 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

In March and April we made a fairly astute call that was out of consensus at the time, that mortgage rates were going to rise due to the evolving economic circumstance, putting margin pressure on mortgage lenders. At the time...

Copper and Nickel 101

11 Nov 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Last week we wrote about the decarbonisation of the global economy, and the subsequent opportunities available in the lithium industry. Central to the task at hand in reaching net zero emissions is developing scalable and efficient technology, which enables the...

COVID-19 Vaccination Update

09 Nov 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

We’re into month eleven of COVID-19 vaccinations globally and eight months into the Australian process. In the past month there’s been many newsworthy items as COVID-19 pills have been tested in clinical trials, with results sent to global health regulators...

Lithium 101

05 Nov 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Decarbonisation has been one of the most talked about phenomenon’s over the past few years, as governments and institutions grapple with how to meaningfully reduce emissions to a point where we can avoid irreparable damage to our planet. Over the...

RBA Changes Tune, Remains in Same Key

03 Nov 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

The RBA met for their 10th and 2nd last policy meeting of the year, yesterday, deciding to play things safe by bowing to market forces and following recent actions and commentary from other global central banks. Whilst they’ve changed different...

Nightmare on Wall Street (Pt.2)

01 Nov 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

For the second time this year, we’re experiencing a bond market sell-off. However, this time around, mostly focused on short term yields rising quicker than longer tenor bond yields . The market term for this is a “bear flattener”. In...

Flexible Working – Attrition Vs. Attraction

29 Oct 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Over the past 18-20 months since the pandemic struck, a trend has been established where workplaces have experienced higher staff turnover, often with employees quitting without another job lined up. This has occurred with increasingly regularity in the past six...

The Housing Basis Trade

27 Oct 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Keeping Up with the Kardashians? The investing equivalent should be “keeping up with the property market”, where those born in the 1980s and 90s are finding our nation’s capital cities increasingly expensive and having to take more risk to just...

Cryptocurrency Regulation: The Elephant in the Room

25 Oct 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

Bitcoin reclaimed its all-time-highs last week, and it seems like time to revisit the world of cryptocurrencies, and more specifically, its largest threat – regulation. Cryptocurrencies, and blockchain technology more broadly, offer the potential to revolutionise our digital world and...

Coal: The Rally No One Wanted

21 Oct 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Over the past two weeks, oil and gas have hit 7-year highs, while coal has hit all-time highs. For some in the market, this may have come as somewhat of a shock – aren’t we supposed to be transitioning away...

AUD Currency Outlook

18 Oct 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

In the past month since we’ve spoken about the trajectory of our AUD and its valuation, quite a lot has changed where AUD/USD has found support and the fundamentals are improving. We nuance our views with the concept of “horizon...

Credit Bonds in a Volatile and Inflationary World

15 Oct 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Yesterday, we held our quarterly Mason Stevens Credit Fund webinar, where the main topics of conversation were regarding inflation expectations, rising bond yields and a steeper yield curve, and how to actively manage fixed income exposure to benefit from a...

Re-Opening Trade: Domestic Healthcare

14 Oct 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

COVID-19 can be viewed as one of the largest points of inflection in our modern society – where there has been a significant shift in thinking towards a greater prioritisation of one’s health. The Australian nation that is re-opening is...

The Pitfalls of Traditional AA Techniques

13 Oct 2021 | By Mason Stevens

READ TIME 8 mins READ MORE

In building investment portfolios, investors utilise expected return and expected risk to build “optimal” or “efficient” portfolios, which relies on our ability to accurately or reasonably forecast future events and asset prices. But what if our expectations are vastly different...

Sharing the Re-Opening Trade

11 Oct 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

As governments around the world continue to loosen restrictions, the travel industry stands out as one of the most significant beneficiaries of the international re-opening trade. When looking into the main players within this space internationally, a trend is clear...

COVID-19 Vaccination Update

08 Oct 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

We’re into month eleven of COVID-19 vaccinations globally and eight months into the Australian process, where we’ve continued to see a ramp-up in local supply allowing for quicker vaccination progress. The good news is that the end is coming into...

Evergrande – The Canary in the Coal Mine?

06 Oct 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Evergrande has received significant attention in mainstream press over the past few weeks, as its potential default has spelt concerns of “contagion” throughout the global economy. The next chapter of Evergrande’s story is yet to be determined, as the world...

Help Wanted

01 Oct 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

The USA’s working age population has grown over the past decade, yet the amount of people participating in their labour market has fallen. Why is that? The answer is subtle: where there are over 24 million Americans that share this...

FAAMG is hard to say but it’s been harder to stomach if you haven’t maintained exposure

30 Sep 2021 | By Darren Letts

READ TIME 5 mins READ MORE

Facebook, Amazon , Apple , Microsoft and Google are now the largest companies in the SP500. Can the market head higher despite the dominance of their business as we head into a post pandemic environment?

A Non-Standard Central Bank Discussion Paper

29 Sep 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Our title says “non-standard” but it could just as easily have said scathing or blistering, as a US Federal Reserve economist has written and published an academic discussion paper that seeks to refute all the recent policy responses from the...

Why the Upcoming Japanese Election is Like No Other

27 Sep 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Most federal elections influence financial markets, owing to the sweeping changes often made to fiscal and sometimes monetary policy by newly elected political parties and their leaders. This fact is especially pertinent for elections over the next year, where governments...

Patient Powell and the RBA Bank Safeguard

24 Sep 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

This has been a fast moving week, between a live Fed policy meeting, the AUKUS agreement and nuclear submarines, the looming spectre of China Evergrande missing bond coupon payments, and RBA providing an explicit framework for how it can provide...

EM and FM, not DM

22 Sep 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

It’s hard to argue that countries with younger demographics, lower public indebtedness and without legacy technology have longer growth runways ahead of them; we’ve known about the opportunities in emerging and frontier markets for years and decades already. The hardest...

Do Government Bonds Still Have a Role in Investor Portfolios?

21 Sep 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

As interest rates have continued to move lower over recent years, a product of a two-decade long period of disinflation and the COVID-19 pandemic, the question has been continually asked – do government bonds still have a place in portfolios?...

Loop and Road Initiative

17 Sep 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Hyperloop is set to be the first new form of mass transportation humankind have developed in nearly 70 years, revolutionising the way we travel – and subsequently the way we live. Current forms of transport require us to live in...

China’s Dynamic Reality

15 Sep 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

In March, we wrote about China’s 14th Five Year Plan, and identified 8 key areas worthy of note and mostly likely to be impactful to investment portfolios. Three of these areas were tech, healthcare and education, where we warned of...

AUD Currency Outlook

13 Sep 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Historically, our AUD’s worth has been defined by three key criteria – commodity prices, interest rate differentials (“carry”) and China. In respect of the developments of 2020, we can now add COVID-19, creating the “four C’s” framework. In today’s note...

Understanding Decentralised Cryptocurrency Exchanges

10 Sep 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

Specialisation and centralisation have played a key role in global capital markets, where only regulated exchanges and counterparties have been able to facilitate the purchase and sale of assets. However, as blockchain technology has developed and gained more mainstream acceptance,...

The RBA to Remain Dovish

08 Sep 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

The RBA met for their monthly policy meeting yesterday and their statement surprised slightly dovish, having re-affirmed their decision to taper their asset purchase program, but doing so in a slowly manner than previously stated. Whilst this is dovish and...

COVID-19 Vaccination Update

06 Sep 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

We’re into month ten of COVID-19 vaccinations globally and seven months into the Australian process, where at present, a large number of Australian residents are in lockdown or working from home to avoid the spread of the delta variant. The...

Reporting Season – Utilities Update

01 Sep 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

I really like analysing utilities, as they tend to perform like bond proxies providing regular income (most of the time), where a substantial portion of their business comes from regulated activities with high degrees of certainty. However, we’d be remiss...

Reporting Season – Information Technology Update

31 Aug 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

The earnings season is nearing completion, and there has been a clear outperformance of growth over value. Some of the greatest upside surprises have come from the Information Technology industry, which should come at no shock given the impact of...

I’m Sorry Ms Jackson [Hole]

30 Aug 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

In the weeks leading towards the annual Jackson Hole Symposium, we weren’t expecting anything profoundly shocking to eventuate, where the Fed – like other central banks – has been slowly providing forward guidance to avoid another calamitous “Taper Tantrum” that...

Gold: An Expensive Paperweight or a Diversifying Asset?

27 Aug 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Gold has long played a role within utility maximising portfolios – given its ability to diversify and reduce volatility. During last years market crash, gold was able to outperform the S&P500 by 30.6%, however outside of its qualities as a...

Reporting Season– Telecommunications Update

25 Aug 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

The Delta variant and Chinese restrictions on iron ore imports has created an uneven earnings season, with some companies flourishing amidst lockdown restrictions, and others being impacted by increasing uncertainty. Within the telecommunications industry, results have been mixed, however significant...

Critical States, Complexity and Piles of Sand

20 Aug 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

We can learn a lot about investing from analysing piles of sand. As children, many of us are lucky to go to the beach as one of Australia’s favourite pastimes, where many of us have built small structures out of...

Online Advertising is an Easy Sell

18 Aug 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Even for the most digitally inept of us, the amount of time we have spent online has gone up. This has enforced lifestyle changes which will likely be irreversible, where in the past, onboarding into the more efficient digital world...

Reporting Season- Banks Update

16 Aug 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

We published a morning note on 28-July outlining the likely outperformance to be received from the likes of CBA and NAB and the potential for large share buyback programmes to commence, creating a strong short-term positive impulse for their share...

Inflation is Psychological

12 Aug 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Describing inflation as “transitory” has to be one of the most annoying terms a central banker can use for investors, as it offers no insight into the time-frame that inflationary pressures will be felt. A 6 month spike in price...

The Future of the Internet: Part 2

11 Aug 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Web 3.0 will serve as one of the most important technological developments of our generation, and promises a more secure and efficient internet, operating through peer-to-peer (P2P) networks which don’t require third parties. No longer will Facebook and Google be...

The Future of the Internet: Part 1

10 Aug 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Many reading this note may remember a time before the internet, when the term “information superhighway” was used unironically and the most complicated pages out there were static text documents with some coloured text. The evolution of what we now...

The Impact of Central Bank Tapering

09 Aug 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Unconventional central bank monetary policy has similarities to driving a car, we aren’t kidding. In recent client conversations, discussions regard central bank “tapering” of unconventional policy initiatives of 2020 have ranged from those thinking tapering will cause volatility and panic...

Fintech: Making Finance Exciting Again

06 Aug 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Fintech seeks to disrupt traditional financial systems through the creation and implementation of innovative technology solutions, intended to increase efficiency, generate synergies, and improve the customer experience. What Fintech offers is the provision of financial services made mostly in conjunction...

COVID-19 Vaccination Update

04 Aug 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

In the 6 weeks since our last COVID-19 vaccination update, there has been an additional 1.04 billion vaccines administered across the globe, where approximately 16% of the human population had received at least 1 dose of various vaccines. Our National...

Why Oil & Gas Could Be Set for Another Bull Run

03 Aug 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

The need to transition to more renewable energy sources is a challenge which is paramount to the survival of the human race. However, the transition requires the development and acceptance of technologies able to efficiently supplant both existing energy needs,...

Investment Rationale 101

02 Aug 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

The essence of investing is to preserve your capital base’s purchasing power, and grow it if possible, in line with investment objectives. In order to formulate a strategy that allows this, we need to have robust processes in place to...

Domestic Banking Update

28 Jul 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Our domestic banking landscape has changed since COVID first impacted our economy last year, where banks were forced by regulators to retain more capital, while our yield curve flattened detracting from net interest margins, and lending volumes plummeted. As 2021...

The Apple of Consumers Eye’s

27 Jul 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

As consumers continue to transition away from cash, the payments ecosystem is becoming increasingly more integral to our global economy. Apple Pay has rose to prominence, capturing 5% of the global digital payments market through its contactless payment method, with...

The Story of the Taper Tantrum of 2013

23 Jul 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

A key reason to draw parallels between our current markets and the situation immediately following the GFC is a term that has been floating around financial media over the last few months of a “taper tantrum”, in relation to if/when...

Finding Income in a Low Interest Environment

22 Jul 2021 | By Mason Stevens

READ TIME 9 mins READ MORE

Jesse Imer, Fixed Income Strategist, breaks down the myth that yield cannot be found within Fixed Income within the current low interest rate environment, and why investors may be overlooking the benefit of pairing of investment-grade credit bonds, with active...

Our mAUDlin AUD

21 Jul 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

When we published our 2021 Outlook last year, we forecast an AUD/USD exchange rate to reach 80c, which happened in 35 days, in early February! Since then, AUD/USD had trended lower, as our AUD has been weak relative to the...

Credit Spreads

20 Jul 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Credit spreads represent the difference in yield between the relevant benchmark (usually government bonds) and the yield of another non-government debt security of the same maturity. As interest rates have gone to record lows, investors have begun to allocate more...

Traffic Jam of Microchips

19 Jul 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Graphics Processing Units (GPUs) serve as one of the only constants within the technology of the now, and that of the future. Despite previously used only for generating computer graphics, they are now set to play a key role in...

The WFH Trade

15 Jul 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Working from home (WFH) is by no means a recent phenomenon, where the movement has grown in popularity ever since the 1970s as female workforce participation rates increased. This trend gained speed as technology developed, making it more practical, and...

Multi-Asset Allocation: Half Year Update

12 Jul 2021 | By Mason Stevens

READ TIME 9 mins READ MORE

We’re a little over half way through the calendar year and it’s time to review our strategic asset allocation framework to confirm or amend our forecasts for this year. In December, we wrote about how POLICY was trumping FUNDAMENTALS in...

The Future of Finance

08 Jul 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

Capital markets exist to improve transactional efficiency, providing a venue to allow the transfer of capital between those who possess it, and those who demand it. Whilst capital markets have enabled economic advancements which have significantly enhanced our standard of...

RBA Decides to Remove SOME Policy Accommodation

07 Jul 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Yesterday the RBA met in a meeting foreshadowed in previous months to be “live”, where they would potentially recalibrate the monetary policy setting of the domestic economy. The RBA didn’t disappoint – amending their asset purchase program, adopting data-based forward...

Taking Advantage of “Lower for Longer”

05 Jul 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

It’s never a bad time to have a conversation about lowering the debt servicing costs of an entity, whether it’s a household, a business or our Federal government. At the Federal level, gross government debt has grown over 200 billion...

Pew Pew Pew Pew Pew

01 Jul 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Our lives are becoming increasingly lived through technology – whether it’s social media, mobile phones, email, video conferencing or video games – and as this trend continues, increased demand for better products and services has provided ample investment opportunities to...

Risk-Off Series: Rotation Into Value/Quality

30 Jun 2021 | By Mason Stevens

READ TIME 3 mins READ MORE

To date, our risk-off series has focused largely on investments which are inversely related to market sentiment, and as a result may only be suitable within short-medium term time frames. These solutions may also not be suitable for those investors...

Long Term Deficit Spending: How the Economics can Justify it

28 Jun 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

The most recent US White House Budget has no budget surpluses forecast for the next decade, likewise in Australia, there’s no budget surplus forecast until 2031/32 fiscal year. This begs the question how governments are proposing to finance these deficits...

Risk-Off Series: Get Long (Duration)

25 Jun 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

What may be evident at this point in our Risk-Off series is that for each opportunity we have to make a risk management decision, there is often a corresponding opportunity to make gains within our portfolios. Touching on risk management...

Will 3D Printing Finally Succeed?

24 Jun 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

3D printing offers a glimpse into the future, where manufacturing and transport networks could be completely overhauled through on-demand, mobile and flexible production channels. Whilst the industry has been in existence for decades, recent developments have made mainstream adoption increasingly...

Risk Off Series: Foreign Currency Exposure

23 Jun 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

In the past, the ability to buy and hold foreign currencies such as US dollars or Japanese yen was unavailable to non-institutional investors, where the minimum requirement was generally millions of AUD of investment, and a private banking arrangement. However,...

Risk-Off Series: Tail Risk and Alternative ETFs

22 Jun 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

As Jesse mentioned in the introductory note to this risk-off series, investors are constantly faced with the possibility of the extreme, be it to the upside or downside. During 2020 we were faced with both circumstances, with the global pandemic...

Interest Rates and Equity Valuations

21 Jun 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Last week several central bankers spoke about their bank’s pathway to normalising monetary policy, which would see a tapering of asset purchase programs and eventual increases to cash rates. Rising bond yields and funding costs has implications to equity valuations,...

A Whole New World

18 Jun 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

The past year has seen markets rapidly evolve through a greater level of retail involvement and an enhanced focus on new asset classes and industries purported to offer a glimpse into our future. However, as momentum behind these trends has...

COVID-19 Vaccination Update

17 Jun 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

We are now into month seven of COVID-19 vaccinations globally, and month four in Australia. Our pace of domestic vaccinations has improved, though still below the original, revised and current target rates for inoculation. However, we are speeding up with...

Risk-Off Series: Investing in Long/Short Equities

16 Jun 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

In the multitude of notes we’ve written about equities, most will make a basic assumption that we are ‘long’, i.e. we are buying the security or fund with the view that the market is going up. But what if we...

Risk-Off Series: Tail Risk, Convexity & Risk Off Investing

15 Jun 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

In 2002, US Secretary of Defense Donald Rumsfeld answered a question by talking about known unknowns and unknown unknowns, events we know but happen but can’t accurately forecast them, and events that happen out of the blue that can’t be...

Geopolitical Update: Indo-Pacific Region

11 Jun 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

With the new year came a new US administration in the White House, where President Joe Biden has since divulged foreign policy priorities, amid the backdrop of rising tensions between the US and China centred around flashpoint issues such as...

Building Portfolios Using Bonds

09 Jun 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

For close to seventy years, government issued fixed-rate bonds have provided satisfactory levels of income at relatively low levels of risk. As interest rates have declined over this period, the income became less and less, an the diversification benefits less...

RBA Transparency and Future Policy

07 Jun 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

The RBA is trying its utmost to provide clear and concise publications that state their policy objectives, and how they’re attempting to reach them. What they’re doing is making it easy for households, businesses, investors etc to get ahead of...

The State of the Re-Opening Trade

04 Jun 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

As the COVID-19 vaccine has been rolled out around the world, investors have flocked towards the re-opening trade - where improved economic growth outlooks would see certain industries outperform. More broadly speaking, this has also involved a move from growth...

Factor Series | Quality

02 Jun 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

The father of value investing, Benjamin Graham, proposed in his 1949 book “The Intelligent Investor” that “chief losses to investors come from the purchase of low quality stocks..” Seventy years later this statement remains relevant, where even during the largest...

Bitcoin & ESG

28 May 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Elon Musk’s recent tweets over the environmental sustainability of Bitcoin have sparked a debate regarding the ESG credentials of Bitcoin, and whether or not it is an appropriate allocation of resources or capital. Whilst some market participants will happily declare...

Factor Series | Growth

26 May 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Growth investors have enjoyed a stellar decade, supported by an equity bull market and record low interest rates. However, with increasing inflationary expectations and lofty growth stock valuations, investors have begun to rotate into other areas of the market. In...

Factor Investing – An Introduction

25 May 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Quantitative factors were once the realm of statisticians and hedge funds, where they’re grown in popularity and accessibility in recent years, and speaking about “growth”, “quality” or “momentum” factors has become commonplace. In short, “factor” based investments seek to isolate...

Why the AUD Isn’t Higher

24 May 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Usually when Australian exporters have big years – like they’re having this year – we see the AUD/USD exchange rate rally where AUD outperforms most other currencies. However, this year AUD/USD is trading in a confined range, while our terms...

Turning Japanese?

21 May 2021 | By Mason Stevens

READ TIME 8 mins READ MORE

In 1991, the total value of Japanese real estate was estimated to be USD $20 trillion, 5 times that of the entire US and making up 20% of the world’s wealth. Since the collapse of their real estate and equity...

Australia Becoming Australi

19 May 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Last week’s Federal Budget projected that Australia would run budget deficits for the next ten years, until 2031/32 fiscal year. With this, the government has changed their rhetoric of balanced budgets and fiscal conservatism, to higher portion of spending and...

COVID-19 Vaccination Update

17 May 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

We are now into month six of COVID-19 vaccinations globally, and month three in Australia. Our pace of domestic vaccinations has improved, though is well below the original, revised and current target rates of inoculation. This presents the shifting economic...

Australian Federal Budget 2021/22

14 May 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

As with all Federal Budgets, there are winners and losers, where during election years, the incumbent government usually seeks a higher spending agenda to create the optic there’s more winners than usual, and they’re looking out for everyone. In that...

Inflation Series: Industrial Metals

13 May 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Industrial metals have historically held strong correlations with inflation, and with good reason. Due to this correlation, they serve as one of the best performing inflation hedge assets, as well as an important bellwether for economic trends. In today’s note,...

Age of Hedonism

10 May 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

In Australia and across the world, we’re seeing higher prices in pet food, corn, wheat, timber, iron, copper, bitumen, housing, accommodation, yet we’ve only seen muted inflation data thus far, as measured by Consumer Price Indexes (CPI). This made us...

Inflation Series: Soft Commodities

07 May 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Soft commodities generally refer to agricultural goods that are grown, rather than extracted from the ground. “Soft” referring to the tensile strength in comparison to harder commodities such as gold, platinum (precious metals) or iron, nickel and cobalt (industrial metals)....

Inflation Series: Precious Metals

06 May 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

The relationship between precious metals and inflation has been shown empirically in the past, including gold and the ‘white metals’, being silver, platinum and palladium. These are also “real assets”, physical pieces of ‘something’ which we believe to have some...

Terms to Use (and Avoid) in Finance

05 May 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Many phrases are thrown around markets, with varying origins and use cases. In today’s slightly lighter note, we will go over some of the more commonly used terms and expressions in the industry, ranging from a “dead cat bounce” to...

Inflation Series | Lumber

03 May 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Inflation is on everyone’s minds right now – specifically regarding if it will eventuate, and whether it will merely be transitory, or more permanent. Lumber prices have surged over 340% in the past year, providing a dramatic example of inflation...

Inflation Series | Inflation Linked Bonds

28 Apr 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Inflation-linked bonds are a specific way to hedge against both expected and unexpected inflation increases in the future, as their capital value and coupon payments are explicitly linked to the Consumer Price Index. As inflation expectations have surged in the...

Build Back Better

26 Apr 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

US President Biden is the man with the plan, having already legislated the American Rescue Plan, he is now seeking approval for the American Jobs Plan, before proposing the next chapter, the American Families Plan. Build Back Better was a...

The Artificial Future

23 Apr 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

When people talk about the technologies which will define our future, one name always pops up – Artificial Intelligence (AI). Whilst it may be difficult to distinguish, AI already plays a role in many facets of society, with its influence...

To Fix or Not to Fix

21 Apr 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

The vast majority of Australians pay variable (floating) rates on their residential home loans, which has been beneficial for the majority of the last three decades, as mortgage rates and other borrowing costs have trended lower. However, if interest rates...

COVID-19 Vaccination Update

19 Apr 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

We are now into month five of COVID-19 vaccinations globally, and two months into the inoculation process in Australia, a month since our last update. On 22-Feb: there were 186mln doses administered worldwide across 82 different countries, at a run-rate...

The Industry of Chance

16 Apr 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Gambling predates almost everything known in human existence, with the first instances of gambling recorded in the Stone Age – almost 3.3 million years ago. Since then, it has evolved dramatically to become a USD $465 billion-dollar industry. In today’s...

Cross-Market Correlation

14 Apr 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Recently we were analysing the trading patterns in Bitcoin relative to more mainstream assets, such as the Australian dollar and Japanese Yen currency cross-rate (AUD/JPY). What we found was that Bitcoin DOES have an effect on AUD/JPY – who would’ve...

Worries over US Bond Auctions

12 Apr 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Government bond auctions are a relatively unknown part of international finance, yet they have wide ranging impacts for government funding costs, taxation, bond valuations, equity valuations, opportunity cost and asset allocation. They’re largely unknown because as long as they work...

The Art of Delivering a Bad IPO

09 Apr 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Deliveroo’s recent IPO was the worst in the history of the London Stock Exchange, falling 26% on its first day of trading. With structural tailwinds driving competitor share prices higher and higher throughout 2020, what exactly went wrong? In today’s...

RBA Policy Becoming More Accommodative

07 Apr 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

If there is anything that central banks have learned – especially our RBA – is that monetary policy is more effective when it is transparent and easily understood. Furthering this agenda, the RBA has published a discussion paper that details...

Demographic change during COVID-19

31 Mar 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Nice Guys Finish First

30 Mar 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Over the past 100 years, financial markets have developed into the beast we now know – offering exposure to anything and everything, ranging from a simple share of Apple to complex derivatives on the Laotian Kip (currency). As our product...

Fantastic Beta and Where to Find Them

29 Mar 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Diversification is an investment process that seeks to lower portfolio risk in order to achieve a lower variability in returns. The importance of diversification only started to be a mainstream economics concept in the 1950s, when Harry Markowitz wrote his...

The Reverse GFC Effect

24 Mar 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

One of the tell-tale signs of the US housing bubble and the subsequent subprime mortgage crisis and credit crisis – later labelled the Global Financial Crisis or Great Recession – was a surge in house prices that peaked in 2006,...

COVID-19 Vaccine Update

22 Mar 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

The world is now into month four of COVID-19 vaccinations, and we’re one month since starting the inoculation process in Australia. It’s also been one month since our last update. On 22-Feb: there was 186mln doses administered worldwide across 82...

The USA’s New Plans for Asia Pacific

17 Mar 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

Title: The USA’s New Plans for Asia Pacific While financial markets have been focusing on; bond markets sell offs,equity market earnings season,COVID-19 vaccine rollouts,cryptocurrency developments, the United States has been rolling out a comprehensive strategy against China and has been...

The Building Blocks of our Future: Investing in Cryptocurrencies (Part 3)

11 Mar 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

By now, we are all used to hearing the same old stories – growing COVID-19 infections, the U.S. government’s newest stimulus bill, and the price of Bitcoin going up. Whilst cryptocurrencies have been around for 10 years, several structural tailwinds...

International Women’s Day & Economic Reform

10 Mar 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

International Women’s Day (IWD) is not new. Its origin dates back to February 28th 1909, thanks to the Socialist Party of America in New York City. Attendees cited the need for a reoccurring and more formalised event with credit to...

Not all Bonds Are Made the Same

08 Mar 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

There has been a lot of hype over the last few weeks regarding the sell-off in sovereign bond yields, most of it fixated on longer-duration government issued fixed-rate bonds of maturities 7+ years from now (2028 or later). Due to...

Nightmare on Wall Street

03 Mar 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Bond markets are not meant to be interesting. Bond markets are where governments and corporates can raise money via borrowing, to finance their operations, projects and objectives. Bond markets are meant to be orderly and stable, a place of mathematics...

The Building Blocks of our Future: Cryptocurrencies (Part Two)

02 Mar 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Investor interest in cryptocurrencies, both from institutions and investors, has exploded over the past six months. Although cryptocurrency has been an existing asset class for over a decade, its renewed public profile makes it important for investors to gain a...

Investing in India

01 Mar 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

The human brain is a funny thing. There is a psychological phenomenon called the mere-exposure effect, a type of familiarity bias, where people tend to develop a preference for things merely because they are familiar to them. In investing, this...

The Building Blocks of our Future: Blockchain (Part One)

25 Feb 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

Cryptocurrencies are the talk of the town, with their total market capitalisation increasing from $344 billion USD on the first day of October 2020, to $1.46 trillion USD as of the 24 February 2021, representing a 324% increase over just...

Central Bank Policy and Geopolitical Stress

24 Feb 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Yesterday I had the opportunity to speak at the Institute of Managed Accounts Professionals (IMAP) conference, held in Sydney. First and foremost, I would like to thank IMAP for the opportunity to attend and speak to the large cohort of...

COVID-19 Vaccine Update

22 Feb 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

The world is now into month three of COVID-19 vaccinations, with over 186 million doses administered worldwide, across 82 different countries, at a rate of 6.34 million doses per day at the current run-rate. Unfortunately for Australians, we are not...

The Rise (and Fall?) of the USD

19 Feb 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

Over time, there are three things which have held true – death, taxes and a change in the global reserve currency. By nature, all predecessors to the USD’s rule as the global reserve currency have fallen – brought down by...

Understanding Bond Call Dates

17 Feb 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

There was once a period of time where government bonds provided the desired income that investors required to meet their objectives. I’m talking about when “govies” used to yield 4% p.a. or higher, basically any time before the last 10...

Investing in Japan

15 Feb 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

It has become an ever-increasing topic of discussion in how to avoid potential market drawdowns this year or next, yet still be invested. In fact, for many balanced and growth mandates, they are required to maintain allocations to equities in...

Implications of a rising AUD on ASX shares

12 Feb 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

The AUD/USD has appreciated by 33% since March 2020 and has brought foreign exchange (FX) risk into the forefront of the minds of investors looking at US equity and fixed income markets. We have discussed the factors which have driven,...

Demographics are Destiny

10 Feb 2021 | By Mason Stevens

READ TIME 6 mins READ MORE

Prelude In order to provide you daily content in our morning notes, we are usually organised ~2 weeks in advance with lists of topics and thematics that we hope will resonate with you. Originally, I had planned to write this...

We Don’t Value Free Things

08 Feb 2021 | By Mason Stevens

READ TIME 4 mins READ MORE

We tend to overconsume things that have no monetary cost. In economics, we call this the “free rider problem” where consumers do not value the inherent costs and benefits of things that are free. Think about it yourself, what is...

The most “attractive” IPO of 2021

05 Feb 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Swipe, swipe, partner for life…? Dating apps have revolutionised the dating industry, with the advent of Tinder in 2013 flipping the script on existing matchmaking services by placing the onus on users to pick and choose from singles in their...

Current State of the Australian Economy

02 Feb 2021 | By Mason Stevens

READ TIME 7 mins READ MORE

Australia’s economy has fared relatively better than most other Western economies throughout the ongoing COVID-19 pandemic. This is due to many factors: our isolation being an island nation that is far from many other global trading hubs; fiscal and monetary...

Recap of Market Events

01 Feb 2021 | By Mason Stevens

READ TIME 5 mins READ MORE

Happy New Year and welcome to our first daily morning note of calendar year 2021! We hope that you all had a lovely holiday period and are rejuvenated for the year ahead. Our last morning note was published on 18...

Six Feet Apart

18 Dec 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

Today is the last note of the year.We’ll return to publishing our daily content on 1 February 2021. First and foremost, thank you for your support this year – reading our publications, utilising our platform and investment service, participating in...

Multi-Asset Allocation in 2021

17 Dec 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

Today’s daily missive marks our second last publication for the year and the last of our 2021 outlooks, finishing with our multi-asset view. While it’s useful to derive and forecast performance objectives for specific asset classes, it’s increasingly important to...

Macro Currency Outlook 2021

14 Dec 2020 | By Mason Stevens

READ TIME 7 mins READ MORE

As primarily a fixed income investor, I spend an inordinate amount of time managing foreign currency fluctuations, as currency exchange rates tend to gyrate more than the underlying bond prices. As an example, it doesn’t make sense to buy a...

Central Bank Policy Fuelling Property Markets

10 Dec 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

The imposition of COVID-19 on societies across the globe may have lead investors to doubt the future prospects of commercial property, while the opposite has occurred in many nation’s residential property markets, as the rise of working-from-home arrangements has re-emphasised...

The COVID-19 vaccine distribution dilemma

02 Dec 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

The American pharmaceutical firm Pfizer, in collaboration with German firm BioNTech, surprised the world when it announced their coronavirus vaccine showed 90% efficacy in preventing COVID-19. Days later, another American firm, Moderna, announced their vaccine has nearly 95% efficacy. Shortly...

Re-thinking Portfolio Composition (Part 2)

30 Nov 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

If you missed last week’s missive, I’d encourage you to take a look, as today I continue from where we left off last week. The original topic was to deconstruct modern portfolio theory, in order to build portfolios that meet...

Fixed income investing in 2021

26 Nov 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

Yesterday, I had the opportunity to speak on a panel discussion hosted by the Institute of Managed Account Professionals (IMAP) regarding what zero% interest rates mean for managed account investing, and how we should invest in defensive and income bearing...

Re-thinking Portfolio Composition (Part 1)

23 Nov 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

Mark Twain once observed: “History does not repeat, but it rhymes.” We are seeing parallels between current markets and 1999, the start of a ten-year period where US equities indices returned negatively. There have been 6 different “Lost Decade” periods...

COVID, our economy and monetary policy

18 Nov 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

RBA Governor Philip Lowe attended the Committee for Economic Development of Australia (CEDA)’s annual dinner on Tuesday evening. The topics he spoke about are not only important to us for their investment implications, but also to understand what policies one...

Gold, Real Interest Rates and the USD

17 Nov 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

The world changed last week, and not just because of the US election. Pfizer announced a COVID-19 vaccine that is looking to be over 90% effective in stage 3 clinical trials. The market also knows that many other COVID-19 vaccines...

To Affinity and Beyond!

10 Nov 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

It is well known that certain companies, such as the mega-tech FAANG stocks, are trading at valuations that are high relative to historical averages. If you’re wondering why – there are two main answers. Investors and traders believe the valuation...

(Un)Compensated Risks

09 Nov 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

For investors, risk and return go hand in hand where for a potentially higher return on capital, there is a corresponding increase in risk. This is known as the risk-return trade-off. It is important to be aware that investing is...

RBA eases policy further

04 Nov 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

The Reserve Bank (RBA) met yesterday and while the market predicted most of the resulting change in monetary policy setting, the Bank did provide some unexpected surprises. The point of policy In our missive on 26 October, we sought to...

Political Overcorrection

02 Nov 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

In advance, thank you to Brent Donnelly at HSBC for the two charts and providing the link to the BBC news article. "Past performance does not indicate future performance." You may have seen this statement or a similar one on...

More Debt Than Expected

28 Oct 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

Governments’ budget proposals are just that – proposals – meaning they are subject to amendments. In implementation, they can differ greatly from their original plan. They are based upon assumptions such as tax rates, unemployment figures, government revenue (tax receipts),...

Why Cut Interest Rates When They’re Near 0%?

26 Oct 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

Monetary policy has become less clear, despite central banks stated desire to promote stability and transparency. It used to be that looking at the RBA’s cash rate target and charting the yields of ASX-listed bank bill futures would provide a...

AUD/Fe

22 Oct 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

Over the last decade, our Australian dollar (AUD) exchange rate has been closely correlated to the relative change in iron ore prices. As iron ore was more highly demanded and bought, our AUD would rally against foreign currencies – all...

When Does Government Spending Become Socialism?

19 Oct 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

I’ve used a provocative title today, but the question has been asked of me more and more in recent weeks - where government expenditure as a ratio of our overall national output (spending/GDP) is growing to higher and higher levels....

Inflation and Debt

15 Oct 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

The price of goods, services and financial assets determine our ability to consume or invest in them. If prices increase and our income does not, then we need to reduce our ability to consume or invest. In terms of goods...

Federal Budget 2020

07 Oct 2020 | By Mason Stevens

READ TIME 7 mins READ MORE

On Tuesday evening, Commonwealth government Treasurer Josh Frydenberg delivered the 2020-2021 budget (delayed since May) which was brimming with a mix of measures designed to boost near-term demand as well as lift longer-term growth and economic output. The latter, the...

Emerging Markets Debt

07 Oct 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

US election implications for financial markets

05 Oct 2020 | By Mason Stevens

READ TIME 8 mins READ MORE

I’ve wrote the majority of this note on 2-October and since original time of writing, it has been reported that US President Trump and his wife have tested positive for COVID-19 and have begun their 14-day quarantine period. It would...

Outlook for our AUD

29 Sep 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

In Monday’s missive regarding the RBA’s (potential) impending rate cut and alteration of current monetary policy settings, the key sentence for me and a lot of other market participants was “Given the outlook for inflation and employment is not consistent...

Another RBA Rate Cut Priced In

28 Sep 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

The market is now pricing in a cut to the Overnight Cash Rate (OCR) from 0.25% for the RBA’s October 6th meeting, with potential to change other policy measures as well. Let’s take a look why. The Australian Economy and...

Red Dirt Road

23 Sep 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

That’s where I first saw Mary, On that roadside picking blackberries, That summer I turned a corner in my soul, Down that red dirt road Brooks and Dunn (2003) Some days my song references and links to my...

Jerusalama

21 Sep 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

Ngilondoloze (Guard me) Uhambe nami (walk with me) Jersulame ikhaya lami (Jerusalem is my home) Master KG [2020] Today marks the vernal equinox so a happy first day of spring for all of us reading in the southern hemisphere....

I’m Like a Bird

16 Sep 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

And it pains me so much to tell you, That you don’t know me that well… Nelly Furtado (2000) [Today is part 1 in a two-part series regarding bank funding and capital – today’s topic being about funding and...

Stairway to Heaven

14 Sep 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

There’s a lady who’s sure, All that glitters is gold And she’s buying a stairway to Heaven Led Zepplin (1971) Last Wednesday, I wrote this note about how central banks are providing so much liquidity in an attempt to...

Volatility and Liquidity

09 Sep 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

“People say I got a drinkin’ problem But I got no problem drinkin’ at all They keep on talkin’ Drawing conclusions They call it a problem, I call it a solution” Midland (2017) My song and band reference...

Summer of ’69

07 Sep 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

Today, I want to talk about the Autumn of ’68 in the USA. While not as catchy as Bryan Adam’s “Summer of '69”, the US Autumn of 1968 was quite a notable period, but for all the wrong reasons. Calendar...

How Can We Be Lovers?

03 Sep 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

Times are rough, but we can make it, We can work it out How can we be lovers if we can’t be friends? How can we start over if the fighting never ends? Michael Bolton (1989) This week...

In the Name of Love

31 Aug 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

Each year there is a large gathering of economists, financial market participants, academics, US government officials in Jackson Hole, Wyoming (USA), to discuss long-term economic policy issues of mutual concern. All the papers are available online. This year’s meetings occurred...

Cash is King

26 Aug 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

Worried Australians have stockpiled fresh Australian banknotes during the current pandemic, with Note Printing Australia issuing over $10billion worth of new notes year to date, increasing the total supply of bank notes 13% from 84 to 95bln AUD. This is...

Wind of Change

24 Aug 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

An August summer night, Soldiers passing by Listening to the wind of change Scorpions (1990) With the publication of ANZ’s Q3 results last week, we closed the reporting season for our Big Four Major banks – ANZ, Westpac,...

Basis Risk and the Three Body Problem

19 Aug 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

Understanding the difference between risk and uncertainty is crucial in every aspect of investing. A decision involving risk lends itself to statistical analysis and econometrics, particularly if the opportunity or idea is common, and the event re-occurring. On the other...

Don’t Stop Believin’

17 Aug 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

“Just a small-town girl, Livin’ in a lonely world, She took the midnight train goin’ anywhere” Journey (1981) A question we increasingly receive at Mason Stevens is if bonds are still a benefit to portfolios. The latest academic research...

MMT and Chill

12 Aug 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

On 1 July 2020, Indonesia’s central bank closed an agreement with the government to fund $40bln USD at zero% interest rate, to fight the coronavirus pandemic. This is the largest debt monetisation program among emerging market nations so far. While...

A Study of Pandemics

10 Aug 2020 | By Mason Stevens

READ TIME 7 mins READ MORE

Just to see you smile, I’d do anything, that you wanted me to, And all is said and done, I’d never count the cost It’s worth all that’s lost Tim McGraw (1997) Today’s note is several weeks in...

Youth Of The Nation

05 Aug 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

“Who’s to blame for the lives that tragedies claim, No matter what you say, It don’t take away the pain” P.O.D. [2001] In Australia, we’ve been relatively lucky that our Commonwealth government has given Australians clarity of government...

Polyester Girl

04 Aug 2020 | By Mason Stevens

READ TIME 3 mins READ MORE

“So shiny, my polyester girl” Regurgitator [1997] Real yields on 10-year US Treasuries hit -1% on Friday – a first for American history – indicating that an investor lending money to the US government (buying their bonds) would...

I Should Be So Lucky

27 Jul 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

Want to hear a bond market joke? Q: What do you call Canada after having its credit rating cut from AAA to AA? A: Canad Thank you, I’ll be here all week. On to the note – last week Tuesday...

Creative Destruction and the Fed Put

22 Jul 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

I don’t have a song for you today – nothing really fits the brief. I want to use today’s missive to talk about the economic term “creative destruction” and the inference that the US Federal Reserve has investors backs and...

All Over Again

20 Jul 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

“And we’re falling all over again, Like a flashback to way back when, Back when we were us.” Luke Combs (2019) It is becoming a consensus view that an Australian economic recovery, as well as a global recovery, hinges upon...

Smooth

14 Jul 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

“And if you said this life ain’t good enough, I would give, my world, to lift you up I would change my life, to better suit your mood” Santana ft. Rob Thomas – Smooth (1999) 32.9 million Americans received some...

Unwinding Confirmation Bias

13 Jul 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

“Don’t call it a comeback, I’ve been here for years” LL Cool J (1990) I set aside time each week in my “reading time” to peruse theories that I disagree with. I believe this is key in mitigating confirmation bias...

What you see is what you get

24 Jun 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

“I’m an easy read but I ain't no open book, Got a knack for making things harder than they look” Luke Combs (2019) Something the RBA is particularly good at is making their balance sheet transparent so that market watchers...

Meanwhile Back at Mama’s

17 Jun 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

“Funny the things you thought you’d never miss, in a world gone crazy as this” Tim McGraw & Faith Hill (2014) This may be new news – but financial markets around the world are in varying stages of transitionary periods...

Moneytalks

15 Jun 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

“Come on, come on, listen to the moneytalk” ACDC (1990) It has been a point of interest that Australian bond markets stick out in attractiveness compared to global peers, starting with our AAA-rated sovereign issued bonds, yielding higher than comparable...

Don’t Dream It’s Over

09 Jun 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

“Hey now, hey now, don’t dream it’s over” Crowded House, 1986 Last week the ABS released Q1 2020’s GDP figure, telling us what we already knew, that economic output declined in Q1 this year. Australia has gone 114 quarters without...

Over My Shoulder

02 Jun 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

It’s been widely publicised that this crisis is different from the GFC, as its origin is medical in nature as opposed to financial. This has prompted us to assess financial markets differently, as the government and institutional responses have been...

Inflation Blues

27 May 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

Understanding inflation is crucial to investing because inflation can reduce the value of investment returns. Inflation impacts all aspects of the economy – be it household spending, business spending, employment rates or interest rates. Inflation is a sustained rise in...

On Top of the World

25 May 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

On Thursday evening, the heads of the Reserve Bank, APRA and ASIC gathered together to host a webinar regarding the Australian financial services sector. The most interesting topic is APRA chairperson Wayne Byres noting it would not be a concern...

Higher Love

20 May 2020 | By Mason Stevens

READ TIME 4 mins READ MORE

Over the weekend I found myself reading an excerpt from Thomas Macaulay, a British historian in the early 1800's. In 1830, T.B. Macaulay wrote in reply to the pessimists of his day: “We cannot absolutely prove that those are in...

Lean On Me

20 Apr 2020 | By Mason Stevens

READ TIME 6 mins READ MORE

Today I would like to take the opportunity to talk about Modern Monetary Theory (MMT), which is a recent socio-economic view stemming from the 1990s. It may be surprising to know that MMT as a standalone concept was developed originally...

Unlimited Kitchen Sinks

30 Mar 2020 | By Mason Stevens

READ TIME 5 mins READ MORE

The phrase “throwing everything but the kitchen sink” gained popularity during World War II when it was delivered to describe using every possible weapon or methodology against the enemy in order to beat them. We use this phrase liberally in...

How Low Can You Go?

19 Jun 2019 | By Mason Stevens

READ TIME 3 mins READ MORE

Today I wish to channel Chubby Checker’s 1960s hit Limbo Rock. As government bond yields head towards recent lows and some countries (ergo: Australia) are at all-time lows, it’s time to explore the possibility of long-term bond issuance as a...

More than a platform

We’re a growth engine for your business

More than a platform

We’re a growth engine for your business

More than a platform

We’re a growth engine for your business

Our service offering

Wealth Platform

Outsourced CIO

Managed Accounts

More than a platform

Client testimonial

Mason Stevens Outsourced CIO

Latest Insights