SALT Funds Management
Our investment philosophy centres on the belief that share markets have characteristics that lead to market inefficiencies that can be exploited over time to deliver superior risk-adjusted returns.
Stronger-than-expected US corporate earnings, and a moderated market view of the risks to bond yields, has allowed an early-May rebound in the US market toward record highs. NZ shares have sat out the offshore bounce, while Australia rose this week as the Aussie Central Bank indicated additional tightening is not their base case.
27/03/2024
The most significant outcome of the Federal Reserve’s latest FOMC meeting wasn’t the near-term monetary policy signals. Rather, it was the seemingly innocuous blip higher in the Committee’s estimate of the long-term (neutral) interest rate. Is this the start of a trend? We think so.
Read the full report here:
https://www.saltfunds.co.nz/salt-insights
As central banks start to signal their next moves will be “data dependent”, markets will be watching each data point with extra scrutiny. This week the key data points, both offshore and here at home, were weaker than expected. So, what does this mean for monetary policy?
29/06/2023
Two years ago, as we were starting the process of building out Salt’s global and diversified product range, we began by giving ourselves time to think about the world into which we were launching these products. We wanted to know not only what opportunities lay ahead, but also what challenges would need to be navigated. That process led to the development of ten structural themes that helped inform the answer to our many questions, including which asset classes we wanted access to, which global managers thought about the future in much the same way as us and were already building solutions to fit, and what an optimal portfolio construction would look like.
Two years later, we thought it timely to review those themes, especially since the initial work was undertaken under the cloud of the global pandemic. As you would expect given their structural nature, the themes remain much the same, though many have evolved over the last two years.
The conclusions also are much the same. First and foremost, the world is a more challenging place in 2023. Heightened political tensions and rising political fragmentation have clear and obvious implication for growth, inflation, and markets.
Furthermore, the retreat of globalisation, challenging demographics, and high and rising public debt levels all argue for lower growth, higher inflation, and shorter economic cycles in the period ahead. But it’s not all bad news as digital transformation and the shift to more sustainable business practices, particularly in energy, provides plenty of opportunities for active investors.
Please click on the following link to read the full report…..
https://www.saltfunds.co.nz/structural-themes
Budget 2023 added a bigger demand impulse into the economy than we were expecting. That could shift the dial on the RBNZ’s OCR deliberations. In a stretched economy, what fiscal policy giveth, monetary policy may have to taketh away. We only have to wait till next week to see how the RBNZ responds.
Monetary policy is entering an interesting phase as central banks around the world start to pause their aggressive rate-hiking cycles. In the US, while the regional banking crisis can’t be ignored, we think it’s the labour market that ultimately matters most. That means we don’t see interest rate cuts this year.
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