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Matthew Sherwood

European ratings downgrades offsets improving US outlook

By Matthew Sherwood | Head of Investment Market Research
Mon, 16 Jan 2012

Global investor sentiment improved in December 2011, as a lack of new developments in Europe prompted investors to focus on the improving nature of US economic data, which continues to indicate that a double dip recession should be avoided and that confidence is gradually improving.  The positive US economic data has been supported by a good start to the earnings season.

Despite the positive market momentum over the past month, investors were reminded of the challenges ahead in 2012 when rating agency Standard and Poor’s (S&P) announced on Friday night the results of its review of European government debt positions.  This followed an announcement in which the ratings agency placed 16 countries on CreditWatch with negative implications in early December 2011.

Nine out of 16 European countries were downgraded
Of the countries reviewed by S&P, Belgium, Estonia, Finland, Germany, Ireland, Luxembourg and the Netherlands maintained their current ratings, with strong external positions, and less leveraged public sectors culminating in a more resilient outlook.  In contrast, Austria, France, Malta, Slovakia and Slovenia were all downgraded one notch, with Cyprus, Italy, Portugal and Spain downgraded two notches (see Table 1). In addition to this announcement, all countries (excluding Germany and Slovakia) were placed on ‘negative outlook’, which indicates that the ratings agency sees a one-in-three chance of a further downgrade later this year or in 2013. Greece was not reviewed in this process.

The key rational for the most recent downgrades was the lack of cut-through in the prevailing policy response. Accordingly, Germany (with a stable outlook and no downgrade) comes out of this review as the clear winner and this will strengthen its position in future regional negotiations. This will reduce the probability of any quantitative easing program to support economic growth as forced austerity measures place more headwinds on the regional growth outlook.

The market impact is likely to be modest, but there is no ‘quick fix’
The direct market impact from the ratings announcements is likely to be subdued, as downgrades have historically resulted in only a 0.2% rise in yields (French 10-year government bonds yields are at 64-year lows of 3.1%). In addition, the possibility of downgrades were well publicised by the ratings agency five weeks ago and regional share and bond markets have had time to price securities accordingly.  Asian markets (including Australia) took the news of the downgrade fairly well, falling between 1 to 1.5% today.  However, it does suggest that there is no ‘quick fix’ to the European situation. Indeed the December 2011 round of ‘reforms’ were more focused on preventing a future crisis than solving the current one and even if it was implemented in every country tomorrow, nothing would be done to increase growth, lower unemployment or improve the debt position of struggling European governments.

The European Financial Stability Facility (EFSF) rescue fund could itself be downgraded
As highlighted in our late-November update to clients, the rescue fund that the European’s have been establishing to reduce funding pressures in government bond markets is well short of the target required. This EFSF was heavily criticised by S&P in terms of its lack of firepower and resources. Some market participants (including RBS) state that the EFSF itself, which is now only funded 40% by AAA rated countries, is likely to face a downgrade itself to AA+; closer to ‘average rating’ of its contributors.

This has reignited market concerns about whether adequate policies were in place to address the Northern Hemisphere debt malaise.  Indeed, Italy’s move to BBB+ placed it much closer to ‘junk’ status and the proposed austerity program from its government has high political risks attached to it and could generate a worsening of the debt situation, as any resulting recession would negatively impact government revenue and government spending. In addition, Italian yields may rise from here as several large investment funds are unable to hold securities not rated ‘A’ or above. This will have flow on effects to funding costs as Italy has to raise around €0.53 trillion in 2012, relative to €0.5 billion in 2011.

Greece’s negotiations with private sector banks have stalled
Meanwhile, there are heightened market concerns that the talks between Greece and the private sector banks are close to collapse especially considering the flare-up in worries over Greece. Talks appear to be close to collapse according to some reports. The sticking point is apparently the size of the losses to be taken by banks and other bondholders as part of a 100bn Euro deal seen as crucial to bringing the country’s debt under control.  This has increased market concerns that Greece was moving closer to becoming the first developed country in nearly 60 years to default on its debt. This highlights the key correlation risk that follows from a worsening in the periphery economies and the lessening of the creditworthiness of the large countries which are funding the bailout funds.

From an investment perspective, these global developments highlight the importance of investing in firms with strong balance sheets and that have lower earnings risk. These are the easiest and by far the best forms of risk management. In every downturn, the companies with the weakest balance sheets decline the farthest. Similarly, during these times investors increasingly look for companies that can generate sustained surplus cash-flow from their operations, whether the environment is supportive or not.  Our fund managers continue to search for stocks that have good yields, potential income growth and those which are attractively valued.

These themes will be discussed in depth in the next edition of Perpetual Perspective, which will be dispatched soon.

European ratings downgrades offsets improving US outlook

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Mon, 16 Jan 2012

Global investor sentiment improved in December 2011, as a lack of new developments in Europe prompted investors to focus on the improving nature of US economic data, which continues to indicate that a double dip recession should be avoided and that confidence is gradually improving. The positive US economic data has been supported by a good start to the earnings season. More »

Markets accentuate the positive

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Tue, 07 Aug 2012

An easing of European funding costs and better-than-expected US Non-farm payrolls on Friday night spurred markets at the end of last week and the positive momentum continued overnight with all major markets up as the bulls returned to the steering wheel. Friday’s US non-farm payrolls (+163,000 in July relative to expectations of +100,000 and +64,000 in June) rose by the highest amount in five months, but US Fed Chairman Bernanke's focus on the unemployment rate (which rose to 8.3% from 8.2%) meant that markets still expect further monetary easing from the US Federal Reserve. More »

All talk, no action from ECB ends stock rally

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Fri, 03 Aug 2012

In the words of Sean Connery in Indiana Jones and the Last Crusade, "Our situation has not improved". Nonetheless, over the past six trading sessions, global sharemarket have surged on the back of three words from the European Central Bank President “whatever it takes”. More »

Understanding the key drivers of fixed income returns

Jonathon Crook
By Jonathon Crook | General Manager Fixed Income

Jon joined Perpetual in October 1999.  He has over 15 years experience in the financial services industry and is currently responsible for the Fixed Income business at Perpetual.  Previous to this role Jon held a number of positions in both Adviser Distribution and Institutional Sales and Service within Perpetual.  Before this, he spent three years with Count Financial Group.  Jon has a Bachelor of Economics from the University of New South Wales and a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia.

Wed, 01 Aug 2012

As a result of the global financial crisis and the ongoing volatility in financial markets, investors have awakened to the vital role fixed income can play in generating reliable income and protecting capital. However, fixed income is a very broad asset class, which includes everything from quality bonds backed by major governments and corporates to high yield, high risk junk bonds. It is therefore vital for investors and advisers to understand what drives the underlying risks and returns of different types of fixed income assets and how they can contribute to an overall portfolio. More »

Sharemarkets rediscover their mojo

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Mon, 30 Jul 2012

Over the past two sessions, the markets have rediscovered their mojo and have experienced strong gains. This all followed on from ECB President Mario Draghi's comments on Thursday night that he will do "whatever it takes" to keep the Euro together, which eased worries that some investors had about the future of the single currency. The positive sentiment flowed into Friday night's session in which sharemarkets, commodities and high-beta currencies were all 'bid' and markets rose aggressively. More »

Diversification helps investors maintain their balance

Michael Blayney
By Michael Blayney | Portfolio Manager

Michael is Portfolio Manager for Perpetual's diversified funds, including the Balanced Growth Fund, Conservative Growth Fund, Diversified Growth Fund and Split Growth Fund.

Michael joined Perpetual in October 2008. Prior to joining Perpetual he worked for seven years at Watson Wyatt as an investment consultant providing investment strategy advice to some of Australia's largest institutional investors.

Michael is a Fellow of the Institute of Actuaries of Australia and has a Bachelor of Science and Bachelor of Law from the University of Queensland.

Wed, 25 Jul 2012

While it has been a very difficult past few years, diversified strategies have helped to partially insulate investors' portfolios from market volatility. In volatile markets, we believe there are a number of key ways to manage risk, and take advantage of opportunities that arise: firstly, through active asset allocation; secondly, through meaningful diversification – both into traditional fixed income, as well as alternative assets; and thirdly, by investing in quality, well-priced securities. More »

Euro band-aids can’t stop the bleeding

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Tue, 24 Jul 2012

Twenty four months of band-aids have solved nothing for Europe and the mechanics of debt have now finally caught up with the region. After a weak Asian session (where Hong Kong (-3.0%), Japan (-1.9%) and Australia (-1.7%) all fell) Europe opened weak and never saw positive territory. More »

Share rally runs out of steam as Euro fears return

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Mon, 23 Jul 2012

After five days of gains across global sharemarkets, weak economic data, rising concerns about Spain and a weak lead from Asia (with Australia (-0.1%), India and China (both -0.7%) and Japan (-1.4%) all down) finally caught up with Northern Hemisphere markets. Spain was the primary trigger as its Government's borrowing costs soared to a new Euro-zone high as fears that its weakening economy won't recover until 2014. More »

Wall Street earnings highlight the bright side of life

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Fri, 20 Jul 2012

After another good Asian session (where Australia (+2.0%), Hong Kong (+1.7%) and Japan (+0.8%) lifted), markets in the Northern Hemisphere took the baton and continued the climb, pushed along by another series of good earnings results from US blue-chip companies. The results pushed the US market up to fresh two month highs. The gains followed the release of better-than-expected earnings results for IBM, eBay and Intel, which outweighed a disappointing result from Morgan Stanley and a raft of economic data disappointments which showed rising jobless claims, a fall in existing home sales and a weak Philly Fed Index. More »

Why fixed income is different from equities

Jonathon Crook
By Jonathon Crook | General Manager Fixed Income

Jon joined Perpetual in October 1999.  He has over 15 years experience in the financial services industry and is currently responsible for the Fixed Income business at Perpetual.  Previous to this role Jon held a number of positions in both Adviser Distribution and Institutional Sales and Service within Perpetual.  Before this, he spent three years with Count Financial Group.  Jon has a Bachelor of Economics from the University of New South Wales and a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia.

Thu, 19 Jul 2012

Investing in fixed income is not like investing in equities or many other asset classes. Fixed income is different because bonds offer asymmetric returns, i.e. when a fixed income asset such as a government bond is purchased, the upside is known. The interest or coupon over the term of that bond and the repayment of the capital is known, assuming the issuer does not default. More »

Markets waiting on the Fed

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Tue, 17 Jul 2012

After a strong performance on Friday night and a positive Asian session, global sharemarkets were a bit mixed last night. The bulls went back to their corrals as concerns about global growth resurfaced following the International Monetary Fund’s modest downgrade to global growth for 2012 (to 3.5%, but some fairly sizable downgrades to the UK, with cuts also for China to 8%, India to 6.1% and Brazil to 2.5%). The IMF stated that its lower forecast is contingent on fast policy action to solve the European Debt Crisis, which has proven to be somewhat allusive thus far. More »

Could Spain’s austerity make things worse?

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Thu, 12 Jul 2012

There were some important developments overnight, but major markets were fairly tame trading between +0.5%. Spain came out and announced €65 billion of tax rises and spending cuts as part of a deal to secure the €100 billion bank bailout package with the European Commission. This included cuts to unemployment benefits and public service salaries, and increases in sales taxes. More »

Are central banks acting too late?

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Mon, 09 Jul 2012

Well markets were under a tri-angulation of fire on Friday night and sharemarkets, cyclical currencies and commodity prices were all down. Initially, it was reported that the European Summit agreement will not be enforceable until late-2013, rather than late-2012 given all the legislative changes required. In addition, governments will be forced to issue guarantees before any bailout funds are provided to regional banks. This soured investor sentiment as the original plan was to break the link between government and bank funding stress, but unless loans are guaranteed, why would a country like Italy (who has more debt than any other country in Europe) raise E20 billion at 6% and lend it to a bank, get 0% (as stressed banks will not be making dividend payments) and wear potential credit risk? More »

Counting on Abacus

Charlie Lanchester
By Charlie Lanchester | Deputy Head of Equities

Charlie is Deputy Head of Equities and Portfolio Manager for 70% of the Industrial Share strategy and 100% of the Australian Sustainability strategy. He also analyses a small number of stocks in the healthcare and gaming sectors.

Charlie joined Perpetual Investments in May 1999 as an Analyst covering a broad range of sectors, and assumed portfolio management responsibilities from 2002.

Charlie began his career as a Graduate Trainee at Schroder Investment Management in London. After five years he relocated to Australia and joined Platinum Asset Management as an Analyst focusing on global telecommunication companies.

Charlie studied modern history at New College, Oxford and has a Bachelor of Arts (Honours). He is also an Associate of the Society of Investment Professional (part of the CFA).

Tue, 03 Jul 2012

The Australian listed property sector was one of the most heavily sold sectors during the global financial crisis, due to highly leveraged balance sheets and falling asset values. Since then, these companies have restructured their debt and simplified their business models, and this has progressively opened up some investment opportunities. More »

One small step

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Mon, 02 Jul 2012

As we approach the 43rd anniversary of the moon-walk, we are reminded of all of the small steps that, through time, culminated in probably mankind's biggest achievement for the twentieth century. The US did not just design a rocket and decide to go; there were six Mercury program missions, 10 Gemini program missions and 11 Apollo missions, which lay the foundation for the events in July 1969. More »

Two simple questions for investors

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Fri, 29 Jun 2012

Markets are short-term focused at present with sentiment swinging on a daily basis between bargain hunting and pessimism. More »

Principal and agent - the changing corporate bond landscape

Vivek Prabhu
By Vivek Prabhu | Senior Portfolio Manager - Strategy & Risk

Vivek has been Portfolio Manager/Credit Analyst since joining Perpetual Investments in August 2004 and is responsible for credit analysis, portfolio construction and trading.

Vivek has over 15 years industry experience and prior to joining Perpetual worked for eight years at Macquarie Bank as an Analyst, Compliance Manager, Assistant Portfolio Manager (Fixed Interest & Currency) and Credit Analyst. Prior to that he spent four years as an accountant/auditor at Coopers & Lybrand (PwC).

Thu, 28 Jun 2012

The domestic bond market is almost twice as large as the market capitalisation of Australia’s listed equity market. In addition to the protection bonds offer investors by virtue of their preferred position in a company’s capital structure, fixed income investments also offer investors a valuable source of portfolio diversification, typically having a low correlation to equities, being lower in risk and offering more predictable returns. More »

Changing lifecycle creates new challenges

Jorden brown
By Jorden brown | General Manager Adviser Distribution

Jorden joined Perpetual in April 2005 and is responsible for managing the Retail Advised strategy within Perpetual's distribution Group. Within Perpetual, Jorden has held a number of National Account Management and Business development roles. Before joining Perpetual, Jorden worked at Macquarie Bank and Rothschild Australia Asset Management in Business Development roles. Jorden holds a Bachelor of Business Studies from Charles Sturt University.

Fri, 22 Jun 2012

The dramatic changes over recent decades in most people’s lifecycle of work, marriage, family formation and retirement, have created huge challenges for people trying to plan for the future, and their financial advisers. More »

Banking on Basel III

Vince Pezzullo
By Vince Pezzullo | Portfolio Manager / Senior Analyst

Vince is the Portfolio Manager for 30% of the Industrial Share strategy and Senior Analyst covering mainly large cap industrial companies, in particular banks, property trusts and telecommunications.

He joined Perpetual in July 2007 as an Analyst and since that time has covered the chemicals, diversified financials, banking, telecommunications, building materials and REITS sectors.

Prior to joining Perpetual, Vince was a senior portfolio manager / analyst in the large cap Australian equities team at Deutsche Asset Management and led the top 100 equities team. In addition, he had stock research responsibilities across a large number of sectors. He also worked in corporate finance and foreign currency for Monte Paschi Australia Limited.

Vince has a Bachelor of Commerce with a major in Economics and Finance.

Wed, 20 Jun 2012

Following the global financial crisis and the failure of Lehman Brothers, there was an increase in the scrutiny of financial institutions and the introduction of more stringent regulations on the sector. More »

Talking STW Communications

Jack Collopy
By Jack Collopy | Portfolio Manager

Jack is the Portfolio Manager of the Smaller Companies strategy and an Analyst covering small cap companies across a range of sectors.

Jack joined Perpetual in November 2001 as an Investment Administrator and Equity Dealer. After four years, he moved into an Analyst role focusing on small cap industrial companies. Jack took on portfolio management responsibilities in June 2010.

Prior to joining Perpetual, Jack gained two years industry experience working in London as an Equities Dealer and Investment Administrator at both Salomon Smith Barney and Goldman Sachs Asset Management.

Jack has a Bachelor of Economics from the University of Sydney.

Tue, 19 Jun 2012

We’ve held STW Communications in our portfolios for a number of years, but recently it’s become one of my favourite stocks because it has a number of the key characteristics I look for. More »

Election over, but the politics is getting really messy

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Mon, 18 Jun 2012

On the day when East Germans voted against government-enforced austerity 49 years ago, the Greek election was run and the pro-austerity New Democracy party (ND - which attracted just 29.9% of the vote, which is 88% complete) is poised to be invited to form a coalition government by the Greek President. World leaders, financial markets and European authorities all breathed a collective sigh of relief with the result, with the anti-austerity left leaning Syriza party (26.7%) coming in second. In a strange twist the total of the anti-bailout parties (46.2%) was higher than the pro-bailout parties (41.8%), but the largest party (the ND) is awarded 50 extra seats under Greek rules for having more votes than anyone else (that, apparently, is democracy for you). More »

Greece is the word

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Fri, 15 Jun 2012

Global sharemarkets have been progressively declining (down between 3% and 10%) since the start of May 2012 in preparation for the second Greek election this weekend. More »

Corporate bonds – the upside of the downside

Michael Korber
By Michael Korber | Head of Credit

Michael has been Head of Credit since joining Perpetual in August 2004. He is responsible for the ongoing strategic review and development of process, reviewing the weekly credit process and reviewing the analysis of all new credit securities.

Michael has over 24 years industry experience and prior to joining Perpetual worked as the first Head of Credit at Macquarie Funds Management, spending six years developing its credit investment processes and building the business from inception to over $7 billion in funds under management. Prior to this, he spent seven years as Divisional Director in Corporate Banking and four years as second in charge to the Head of Macquarie Bank Credit. Earlier, he had spent five years as a Credit Analyst with Westpac Corporate Banking.

Tue, 12 Jun 2012

With Europe struggling to bring its government and bank solvency crisis under control, the yields on Italian and Spanish bonds have soared to dangerous levels, while those of supposedly safe-haven countries, the US, Germany, Japan, have rallied to record lows. More »

Sovereign bonds – risky or risk free?

Vivek Prabhu
By Vivek Prabhu | Senior Portfolio Manager - Strategy & Risk

Vivek has been Portfolio Manager/Credit Analyst since joining Perpetual Investments in August 2004 and is responsible for credit analysis, portfolio construction and trading.

Vivek has over 15 years industry experience and prior to joining Perpetual worked for eight years at Macquarie Bank as an Analyst, Compliance Manager, Assistant Portfolio Manager (Fixed Interest & Currency) and Credit Analyst. Prior to that he spent four years as an accountant/auditor at Coopers & Lybrand (PwC).

Fri, 08 Jun 2012

Sovereign bonds represent a loan made to a national government, typically denominated in that country’s currency. Traditionally, they were considered risk free, as sovereigns could either print money or raise taxes to repay their debt when it fell due. In the case of countries in the European Union with a common currency, individual countries can’t unilaterally print currency to repay debt. Concerns surrounding the credit quality of some sovereigns, such as Italy and Spain, have seen yields on their government debt soar. More »

Looking beyond stormy weather

Matt Williams
By Matt Williams | Head of Equities

Matt is Head of Equities and responsible for the strategic direction of the equities business and oversight of all investment strategies. He also provides support and mentoring to the analysts and portfolio managers in the team. Matt is the Portfolio Manager for the Australian Share strategy, the Pure Value Share strategy and the Global Resources strategy. In the past he has managed the Smaller Companies strategy and 50% of the Industrial Shares strategy.

Matt joined Perpetual Investments in August 1993 as an Equities Dealer, before becoming an Analyst in 1997 and Portfolio Manager in 1998.

Prior to joining Perpetual, he worked as a Board Broker on the Australian Option Market and as a Cash/Bills Dealer at Lumley Corporation.

Matt has a Bachelor of Economics from the University of New England.

Thu, 07 Jun 2012

One of the most important aspects of our investment philosophy at Perpetual is that we don’t just ‘move with the pack’ and invest in stocks that are in the index, or that other investors like. We conduct rigorous analysis on stocks and draw our own conclusions about whether they’re worth holding in our portfolios or not. A good example of this is Insurance Australia Group (IAG)... More »

30 June deadline for over 50s super boost

Perpetual
By Perpetual

Perpetual is one of Australia’s most experienced investment and trustee groups, with an enduring passion for protecting and growing our clients’ wealth.

Our vision is to be the leading provider of wealth management products and services to financially successful investors and their advisers, and to be the leading corporate trustee.

Founded in Sydney in 1886 as Perpetual Trustees, we’ve helped generations of Australians invest and manage their wealth through all market conditions.

Tue, 05 Jun 2012

People aged 50 and over have up until 30 June this year to boost their super with up to $50,000 in concessional (pre-tax) or deductible contributions. More »

Much better prepared this time around

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Mon, 04 Jun 2012

Although some investors may feel there are some similarities between 2008 and 2012, there are some important differences. More »

Grexit or Spanic?

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Thu, 31 May 2012

Market commentators love their abbreviations. At the moment Grexit (or Greek exit) is a hot topic in Europe, but the main game for investors may be Spanic (or Spain panic). More »

So what's the alternative

Damien Webb
By Damien Webb | Head of Multi Manager Funds

Damien joined Perpetual in January 2003 and is the Head of Multi Manager for Perpetual’s Select multi-manager fund. As Head of the Multi Manager funds, he is responsible for the Perpetual multi-manager investment process, manager research and selection and ensuring that the multi-manager funds are invested in line with approved policies. Prior to joining Perpetual, Damien held a number of positions at ING Investment Management. From January 2000, he was a Portfolio Manager for Optimix Investment Management, ING’s multi-manager group, where he was responsible for manager research and blending and contributing to the tactical asset allocation strategy. Damien received a Bachelor of Economics degree from Sydney University and is an Associate of the Securities Institute of Australia, having completed his Graduate Diploma in Applied Finance and Investment. In 2006, Damien completed his Masters in Applied Finance with Macquarie University.

Thu, 31 May 2012

As a result of the financial market turmoil of recent years, many investors have been searching for ways to diversify their returns and help insulate their portfolio in times of market stress, such as now. More »

Beware of bull about bonds

Michael Korber
By Michael Korber | Head of Credit

Michael has been Head of Credit since joining Perpetual in August 2004. He is responsible for the ongoing strategic review and development of process, reviewing the weekly credit process and reviewing the analysis of all new credit securities.

Michael has over 24 years industry experience and prior to joining Perpetual worked as the first Head of Credit at Macquarie Funds Management, spending six years developing its credit investment processes and building the business from inception to over $7 billion in funds under management. Prior to this, he spent seven years as Divisional Director in Corporate Banking and four years as second in charge to the Head of Macquarie Bank Credit. Earlier, he had spent five years as a Credit Analyst with Westpac Corporate Banking.

Wed, 23 May 2012

There’s been a lot of comment lately about the appropriate allocation to bonds in superannuation and retirement pension portfolios. However, even those commentators who have suggested that investors need to increase their strategic weighting to bonds over the long term have expressed concern that now might not be such a great time to do it. But what many clients don’t understand is that there are bonds and there are bonds, carrying very different kinds of risk – credit risk and duration (interest rate) risk. More »

Europe - who should leave and how?

Matthew Sherwood
By Matthew Sherwood | Head of Investment Market Research

Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.

Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.

Mon, 21 May 2012

European troubles have resurfaced and the question now is whether Greece will leave the Euro or be kicked out. Matt Sherwood, Perpetual’s Head of Investment Market Research proposes a solution. More »

A peak at Oil Search

Paul Skamvougeras
By Paul Skamvougeras | Portfolio Manager

Paul is the Portfolio Manager for the SHARE-PLUS Long-Short strategy, the Pure Equity Alpha strategy and the Concentrated Equity strategy.

Paul rejoined Perpetual Investments in February 2010 as a Portfolio Manager, having previously spent seven years with Perpetual. He began his career with Perpetual in 1994 in a back office role, moving into a dealing role after three years, working his way up to the Head Dealer role.

Between stints at Perpetual, Paul spent seven years working at CPH/Ellerston Capital, where he had portfolio management responsibilities for an Australian long/short strategy for the first four years and a global long/short strategy for the last three years.

Paul has a Bachelor of Economics from Macquarie University and is a Member of the Institute of Chartered Accountants.

Fri, 18 May 2012

Oil Search is an oil and gas exploration and development company that operates all of Papua New Guinea’s (PNG’s) productive oil and gas fields. There are a number of reasons why I like the stock. More »

Finding a GEM

Jack Collopy
By Jack Collopy | Portfolio Manager

Jack is the Portfolio Manager of the Smaller Companies strategy and an Analyst covering small cap companies across a range of sectors.

Jack joined Perpetual in November 2001 as an Investment Administrator and Equity Dealer. After four years, he moved into an Analyst role focusing on small cap industrial companies. Jack took on portfolio management responsibilities in June 2010.

Prior to joining Perpetual, Jack gained two years industry experience working in London as an Equities Dealer and Investment Administrator at both Salomon Smith Barney and Goldman Sachs Asset Management.

Jack has a Bachelor of Economics from the University of Sydney.

Wed, 16 May 2012

G8 Education Limited is the only child care centre operator listed in Australia (ASX code: GEM) and there are a number of reasons why I like the stock. More »

This information has been prepared by Perpetual Investment Management Limited (PIML) ABN 18 000 866 535, AFSL 234426. It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. You should consider, with a financial adviser, whether the information is suitable for your circumstances. The views expressed in this article are the opinions of the author at the time of writing and do not constitute a recommendation to act. Any information referenced in the article is believed to be accurate at the time of compilation and is provided by Perpetual in good faith. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. No company in the Perpetual Group (Perpetual Limited ABN 86 000 431 827 and its subsidiaries) guarantees the performance of any fund or the return of an investor's capital.