Invest
Could the rise of populism could impact your portfolio?
Populism is quickly growing across the developed world, and one asset manager says this should factor into the buying decisions of Australian investors.
Could the rise of populism could impact your portfolio?
Populism is quickly growing across the developed world, and one asset manager says this should factor into the buying decisions of Australian investors.
According to the estimations of asset manager T. Rowe Price, about 40 per cent of the world’s governments are run by populist parties.
For the asset manager’s head of international fixed income, Arif Husain, the economic ramifications of this should be carefully considered and catered for in portfolio construction.
For example, the corporate governance of public companies can be impacted by the mandates of populist governments, which have a tendency to want to produce, manufacture and distribute on home soil, according to Mr Husain.
“If you have big government starting to tell companies where to produce things, then the profit margins start to get eroded. The efficient use of capital starts to change,” he said.
“It probably will end on a global scale with less trade and slower growth as countries start to isolate.
“The trend of globalisation, which is a hugely important driver, is starting to ebb away. Growth is flatlining, and the traditional model is starting to break down,” he said.
Australian investors need to realise that these market forces can lead to higher inflation, more volatility, weaker currencies, and deteriorating bond yields and credit ratings.
“You need liquidity; you need to be dynamic; your strategic asset allocations need to think about what’s coming next, but at the same time, you need to be tactical, because if volatility is here, there is going to be plenty of opportunities to make money,” he said.
Stock market
The pros and cons of DIY investing
“Social trading” is being flagged as a very real issue now affecting the Australian stock market – especially as low-cost stock trade platforms gain popularity. ...Read more
Stock market
Where to find dividends in a low-rate environment
Australian investors who are income-focused are still able to find strong dividend-paying stocks, but the market is changing, an expert has said. ...Read more
Stock market
Did investors overreact to the COVID-19 pandemic?
The economic downturn has not hit many sectors of the economy as hard as first predicted, with the reporting season revealing that many sectors will recover quickly, an investment fund has revealed. ...Read more
Stock market
Market volatility not a worry for Millennial investors
In spite of COVID-19-related volatility, Australian investors aged between 24 and 39 remain bullish about the current sharemarket. ...Read more
Stock market
Why investors will miss their mark for the next 5 years
Australian investors are urged to rethink their investment targets, with the COVID-19 recovery likely to have an impact on returns, new research has found. ...Read more
Stock market
Standing strong in a crisis, ethical investments are here to stay
Ethical investments are more than just a short-term fad, an investment manager has advised. ...Read more
Stock market
Sovereign wealth fund goes negative for the first time since the GFC
The Future Fund has posted a rare negative return for 2020 and warned that a “challenging and volatile” economic climate could hurt previously strong gains moving forward. ...Read more
Stock market
Don’t worry about dividends: Stocks still going strong
Dividends are still up for grabs for active investors willing to wade through the major headlines and an abundance of market negativity, an investment expert has flagged. ...Read more
Stock market
The pros and cons of DIY investing
“Social trading” is being flagged as a very real issue now affecting the Australian stock market – especially as low-cost stock trade platforms gain popularity. ...Read more
Stock market
Where to find dividends in a low-rate environment
Australian investors who are income-focused are still able to find strong dividend-paying stocks, but the market is changing, an expert has said. ...Read more
Stock market
Did investors overreact to the COVID-19 pandemic?
The economic downturn has not hit many sectors of the economy as hard as first predicted, with the reporting season revealing that many sectors will recover quickly, an investment fund has revealed. ...Read more
Stock market
Market volatility not a worry for Millennial investors
In spite of COVID-19-related volatility, Australian investors aged between 24 and 39 remain bullish about the current sharemarket. ...Read more
Stock market
Why investors will miss their mark for the next 5 years
Australian investors are urged to rethink their investment targets, with the COVID-19 recovery likely to have an impact on returns, new research has found. ...Read more
Stock market
Standing strong in a crisis, ethical investments are here to stay
Ethical investments are more than just a short-term fad, an investment manager has advised. ...Read more
Stock market
Sovereign wealth fund goes negative for the first time since the GFC
The Future Fund has posted a rare negative return for 2020 and warned that a “challenging and volatile” economic climate could hurt previously strong gains moving forward. ...Read more
Stock market
Don’t worry about dividends: Stocks still going strong
Dividends are still up for grabs for active investors willing to wade through the major headlines and an abundance of market negativity, an investment expert has flagged. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
