The Role Reversal: Emerging Risks in the World’s Mature Economies

InvestorDaily

On a recent trip to Australia, I found the discussions and questions from the wholesale (adviser) market were grounded in problems to be solved and opportunities to be captured. It became clear that they are very much focused on investing with an absolute return mindset, rather than seeking to take excessive risk. They are looking for opportunities to compound capital over time and go where the opportunities are; but also, where people feel comfortable. It is a practical, common sense, long-term approach to investing.

So given this, I was struck that, while advisers are laser-focused on protecting clients’ capital, the same focus does not always apply when looking at how portfolios might differ from benchmarks. In fact, there is a view among some that it is ‘safer’ to be close to the index. That said, there is clearly some worry about large exposures to the US. If you invest passively or in many global equity funds, you know you may have over two-thirds of your money going to the US. And I did sense more people are beginning to question if that is still appropriate.

The rest of this article can be found at investordaily.com.au.