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Mark Williams, Asia: Why we are cautious on Australia

September has seen a material decline in the Australian dollar against the US$ which at writing on the 25th of September has fallen 5.8%, and is now 7.2% lower than this year’s peak. The equity returns ytd are marginally negative (-0.8%) in US$ terms and we see no reason to increase our relatively low exposure to the market given the negative dynamics are likely to continue.

Anthony Cross, Economic Advantage: No breakdown in long-term approach as we add the AA to the Fund

The long-term approach we take when investing in companies means that, on average, we hold them for a significant period of time and portfolio turnover is correspondingly low. With stocks exiting the Special Situations portfolio infrequently, ‘slots’ for new investments to be added arise fairly rarely. Although the weighting we assign to each portfolio holding is determined by our proprietary risk grading system – meaning that the number of companies in the portfolio will vary – we typically have room for around 50 stocks.

John Husselbee, Multi-Manager: Sleeping with one eye open

Investing in financial markets is often a trade-off between following price momentum by investing in assets that are outperforming and trying to take advantage of ‘value’ opportunities by picking those that have underperformed. At the beginning of the year, we expected equities to continue to outperform government bonds and cash. The US Federal Reserve had announced its intention to commence tapering, a deceleration of its bond-buying programme, while the Bank of England had put on its own quantitative easing (QE) programme on hold. With signs of a sustainable economic recovery on the horizon, the tone of both central banks was shifting from easing to a gradual tightening of policy and the beginning of interest rate normalisation. This is an environment which would be fundamentally less favourable for bonds but still be supportive of equity markets.

Disclaimer

Any opinions expressed should not be construed as advice for investment in any [product or] security mentioned or which may form the underlying content of any topics discussed in this blog.  The information and opinions provided in this blog take no account of the investors’ individual circumstances and should not be taken as specific advice on the merits of any investment decision.   Any opinions or information provided has been based on sources we believe to be reliable at the time of this blog’s preparation: no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of such information.  Neither Liontrust, nor any of its partners, employees, representatives or agents accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of our research or its contents.

Liontrust, its partners and/or employees may have had, have or will have positions in the securities (or related financial instruments) which are those referred to, or those underlying the content discussed in this blog.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a regulated investment advisor or licensed stock broker before investing.

Shares in companies referred to may be relatively illiquid and hard to trade, therefore riskier than other investments and there could be a large bid/offer spread, so if you need to sell soon after you’ve bought, you might get less back than you paid. This can make them riskier than other investments.