Media

2016 has already been a year of big surprises. It is a year in which we have seen an unexpected majority of British voter’s support an exit of the European Union, terrorist activity has grown in prominence and regularity and there is now a real chance that the previously incomprehensible may in fact become a reality with the US presidential election. Despite all these apparent challenges to global harmony, equity markets around the world have continued to rally.

June 2016 Markets Commentary

Bernard Doyle and Slade Robertson comment on the recent Brexit referendum result and portfolio positioning.

(Click here for the recording)

Nick Dravitzki talks to Paul Henry regarding the proposed merger between Vodafone and Sky TV.

http://www.radiolive.co.nz/VodafoneSky-merger---why-does-Vodafone-get-51-share-when-Sky-is-making-far-more-money/tabid/506/articleID/123554/Default.aspx

While the Government’s 2016 Budget must be rated highly for prudent fiscal management, it again fails to address a number of the key and increasingly pressing issues facing New Zealand. On the positive side, our country’s accounts are in good shape and we will move into a strong fiscal surplus over the next 5 years based on the Treasury’s optimistic growth forecasts.

The only sensible conclusion an observer can come to is that there is no real political will to address the Auckland housing crisis. While a number of serious solutions are self-evident, the level of the debate is bogged down in headline grabbing but relatively ineffective proposals like registration and a potential land tax on foreigners. Foreign property taxes have been relatively ineffective in other countries including Singapore which has a 15% stamp duty payable by foreign purchasers.

It seems like everywhere you go these days people are talking about the “yield”. The rationale goes something like this: global central banks have sought to drive investors into higher yielding assets by buying up long term government debt (and thereby depressing its yield), consequently investors have sought higher yield wherever it can be found, and some of that cash has flowed into higher dividend paying shares.

Global equity markets have started this year in a truly volatile fashion. A range of factors have impacted  investor sentiment including concerns over Chinese growth, commodity price deflation and a continuation of the extraordinary monetary policies that have defined life in the post-GFC era. This past month local stocks have had the chance to step out from under the macro cloud and provide insights into how their businesses are performing by releasing their profit results.

Devon Funds Management has launched a new product aimed at the burgeoning demand for income in a low-yield environment.

The Devon Diversified Income Fund follows on the back of similar successful product issues in the space by fellow NZ boutiques, Mint and Milford.

From inception in April 2010, the Milford Diversified Income Fund has grown to almost $1.2 billion as at the end of January while the similarly-named Mint income product has accrued about $75 million since its launch less than two years ago.

Russell Investments has doubled the number of underlying managers in its NZ shares fund.

The NZ shares fund is one of the five Russell-managed portfolio investment entity (PIE) products marketed by Wellington-based Implemented Investment Solutions (IIS).

A note to Russell Investments NZ Shares Fund clients says Devon Funds Management had been awarded a mandate that would eventually see it split duties evenly with incumbent Harbour Asset Management.