Invest
The 3 questions investors considering international equities need to ask
Invest
The 3 questions investors considering international equities need to ask
A Nest Egg poll has revealed that more than one in four investors want to learn international equities, but there are three questions investors should ask first.
The 3 questions investors considering international equities need to ask
A Nest Egg poll has revealed that more than one in four investors want to learn international equities, but there are three questions investors should ask first.
That’s according to the managing director at Hyperion Asset Management, Tim Samway. Speaking to Nest Egg, Mr Samway said that there are “clearly… three things that make it harder to invest in global equities from Australia”.
He explained that when it comes to making decisions, investors need to consider where they’re getting their information from. The second question is whether the information stands up. The third consideration is their actual investment strategy: active or passive?
1. Where am I getting my information?
Mr Samway said that the Australian financial press is good and freely available, but that investors shouldn’t rely on just that.
“Here in Australia you need to go the next step in getting information,” he explained. “Clearly a private investor is not going to travel the world trying to visit these companies or analyse their markets, so you need a very reliable source and information and you need to know that that [source] will be around for some time if you're going to do it yourself.”
“Most people use a manager to do it and essentially outsource the job of finding that information, travelling the world, analysing industries and formulating a portfolio that meets their objectives.”
He added that investors that take on the researching role by themselves will face “a hundred complicating factors” like issues surrounding taxation, custody and currency.
“That's not to be sneezed at. Some of that stuff is quite challenging, so most Australians… if they're looking to invest globally would choose a manager to do so.”
2. How good is my information?
“When people are investing globally, the challenge for them is the lack of information here and the focus on the information that we get on global markets is likely to be sensational,” he argued.
He said mum-and-dad investors should be aware that “they’re at a substantial disadvantage” to professional investors if they don’t diversify their sources of information to include more than just the financial press.
"That's the skill of a fund manager — being able to determine what's valuable... as opposed to — I'm reading everything and 90 per cent of it is not relevant for making an investment decision."
3. Active or passive?
One of the biggest factors in moving into international equities is choosing whether to hire an active manager or not, Mr Samway said.
“People have to decide if they're going to hire an active manager who can attempt to make larger returns than just an index or whether they're happy to get a low fee and just have a passive investment that just diversifies away from Australia,” he said.
“That is, [a passive investment] will do what the market does and it won't be doing what the Australian market does. It'll be in another currency.”
According to new data from investment consultant, bfinance, more than one-quarter (28 per cent) of all new equity manager selection projects in the last year have been for emerging markets, with “Global Emerging Market” managers the most popular. However, “Emerging Asia” also received significant attention.
“This is a stark contrast with the previous year, when global equity mandates made up almost 40 per cent of the total number of new equity mandates (now 24 per cent) and the US dominated the regional picture,” bfinance said.
Noting that emerging market and Asia-focused equity managers have “been a high priority among pension funds and investors”, the bfinance report argued that the return of investor interest in emerging markets is “proving to be the most significant allocation trend of 2017”.
Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more
Property
How to turn your ‘costly’ lifestyle investment into a money-making asset
Emotionally driven holiday home buyers are being advised to seek maximum rental income and depreciation benefits to make their investments viable. ...Read more
Property
Dutch e-commerce giant VidaXL ramping up Australian operations
Netherlands-based online retailer VidaXL is ramping up its operations in Australia, by launching the build of a brand new 81,000 sq m national distribution centre in Melbourne. ...Read more
Property
Invest in property or watch savings dwindle, expert warns
Money is cheaper than it’s ever been on the back of a favourable interest rate environment, compelling Aussies to shift away from other types of investment vehicles and into property investment. ...Read more
Property
Is 2021 a great year to buy property? Aussies think so
2021 is tipped to be one of the busiest years for property ever as money remains cheap and readily accessible, with a majority of Aussies agreeing that now is a good time to buy. ...Read more
Property
Young Aussies set their sights on home ownership in 2021
The COVID-19 pandemic has accelerated younger Australians’ desire to own their own home, despite affordability remaining a significant concern, new research has revealed. ...Read more
Property
HomeBuilder stimulus causing surge in new houses: ABS
Housing schemes such as HomeBuilder and historically low-interest rates are causing a surge in new properties being built in Australia, official stats have shown. ...Read more
Property
Cancelled gap years could trigger first home buyer frenzy
COVID-19’s cancellation of travel plans could fuel demand from first home buyers in Western Australia, according to a chief executive. ...Read more
Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more
Property
How to turn your ‘costly’ lifestyle investment into a money-making asset
Emotionally driven holiday home buyers are being advised to seek maximum rental income and depreciation benefits to make their investments viable. ...Read more
Property
Dutch e-commerce giant VidaXL ramping up Australian operations
Netherlands-based online retailer VidaXL is ramping up its operations in Australia, by launching the build of a brand new 81,000 sq m national distribution centre in Melbourne. ...Read more
Property
Invest in property or watch savings dwindle, expert warns
Money is cheaper than it’s ever been on the back of a favourable interest rate environment, compelling Aussies to shift away from other types of investment vehicles and into property investment. ...Read more
Property
Is 2021 a great year to buy property? Aussies think so
2021 is tipped to be one of the busiest years for property ever as money remains cheap and readily accessible, with a majority of Aussies agreeing that now is a good time to buy. ...Read more
Property
Young Aussies set their sights on home ownership in 2021
The COVID-19 pandemic has accelerated younger Australians’ desire to own their own home, despite affordability remaining a significant concern, new research has revealed. ...Read more
Property
HomeBuilder stimulus causing surge in new houses: ABS
Housing schemes such as HomeBuilder and historically low-interest rates are causing a surge in new properties being built in Australia, official stats have shown. ...Read more
Property
Cancelled gap years could trigger first home buyer frenzy
COVID-19’s cancellation of travel plans could fuel demand from first home buyers in Western Australia, according to a chief executive. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
